ABC Company manufactures sophisticated lenses and mirror used in large optical telescopes. The company is now prepared its profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product line from the following information: (5 Marks)

Lenses Mirrors

Units produced 25 25

Materials moves per product line 5 15

Direct labor hour per unit 200 200

The total budgeting material handling cost is $50,000

Required:

Allocate material handling cost for mirror and lenses by using ABC Method and Traditional Method.