Accounting for materials handling costs The Felles Manufacturing Company budgets the following costs for material handling activities for the coming year. All personnel costs are for people working in the material handling activities and all facility costs are for inventory store- room space and other inventory related facilities.

The company expects to process 8,000 material requisitions for material costing a total of $8,000,000. The estimated total weight of the material sent to production is 10,000 tons. The expected level of activity for the coming year is 100,000 direct labor hours. The company uses direct labor hours as its manufacturing overhead application base.
The following jobs were started and completed in January. The material requisition data are presented below:

Transcribed Image Text:

Salaries and wages Employee benefits.. Maintenance .... $ 82,000 26,000 5,000 Depreciation, building 12,000 Depreciation, equipment.... 7,000 Utilities 8,000 Property taxes 3,000 Insurance 14,000 Miscellaneous 3,000 Total $160,000