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Regal Toys Corp. produces a board game, a paint-by-number set, and a jigsaw puzzle. Production and sales information is as follows: Board Game Paint-By-Number Jigsaw

Regal Toys Corp. produces a board game, a paint-by-number set, and a jigsaw puzzle. Production and sales information is as follows:

Board Game

Paint-By-Number

Jigsaw Puzzle

Units produced and sold

10,000 units

5,000 units

2,500 units

Sales price per unit

$10.00

$19.00

$9.00

Direct materials per unit

$4.05

$5.80

$1.75

Direct labor per unit

$1.20

$1.60

$0.90

Machine hours per unit

1 MH

3 MH

2 MH

Regal Toys incurred $96,000 in fixed manufacturing overhead, which is applied based on the practical capacity of machine hours. Regal Toys also incurred $0.40/machine hour in variable manufacturing overhead. Regal Toys has a practical capacity of 40,000 machine hours.

Determine the total amount of excess capacity costs.

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