Question
Big Trail Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel
Big Trail Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year:
Machining Department | Finishing Department | |
Estimated Manufacturing Overhead by Department | $ 700 comma 000$700,000 | $ 300 comma 000$300,000 |
Trail Running Shoes | 440 comma 000440,000 machine hours | 9 comma 0009,000 direct labor hours |
Running Apparel | 60 comma 00060,000 machine hours | 71 comma 00071,000 direct labor hours |
Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department.
At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel:
Machining Department | Finishing Department | |
Trail Running Shoes | 442 comma 000442,000 hours | 8 comma 5008,500 hours |
Running Apparel | 57 comma 00057,000 hours | 72 comma 00072,000 hours |
How much manufacturing overhead will be allocated to the trail running shoes? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A.
$ 250 comma 000$250,000
B.
$ 650 comma 675$650,675
C.
$ 651 comma 717$651,717
D.
$ 1 comma 000 comma 475$1,000,475
Click to select your answer.
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