Question
7. Shaver Co. manufactures a variety of electric razors for men and women. The company's plant is partially automated. Listed below is cost driver information
7. Shaver Co. manufactures a variety of electric razors for men and women. The company's plant is partially automated. Listed below is cost driver information used in the product-costing system:
Overhead Cost Pool | Budgeted Overhead Cost | Budgeted Cost Driver Level | Cost Driver | |||
Machinery depreciation/maintenance | $ | 169,386 | 24,600 | Machine hours | ||
Factory depreciation/utilities/insurance | 120,990 | 24,600 | Machine hours | |||
Product design | 580,752 | 36,720 | Hours in design | |||
Material handling | 1,113,108 | 222,000 | Pounds of raw materials | |||
In addition, Shaver expects to spend $483,960 for 8,066 direct labor-hours. Two current product orders had the following requirements:
Mens Razors | Womens Razors | |||||
Units produced and sold | 24,000 | 31,000 | ||||
Direct labor hours | 30 | 40 | ||||
Pounds of raw materials | 784 | 674 | ||||
Hours in design | 20 | 23 | ||||
Machine hours | 69 | 54 | ||||
What is the total manufacturing overhead assigned to the current order for Men's Razors if the firm uses a volume-based plant wide overhead rate based on direct labor dollars?
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$1,620.00.
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$11,316.00.
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$250.10.
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$7,380.00.
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$16,974.00.
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