Question
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
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 | $ | 168,640 | 27,200 | Machine hours | ||
Factory depreciation/utilities/insurance | 127,840 | 27,200 | Machine hours | |||
Product design | 554,400 | 38,500 | Hours in design | |||
Material handling | 1,078,000 | 134,750 | Pounds of raw materials | |||
In addition, Shaver expects to spend $514,368 for 8,037 direct labor-hours. Two current product orders had the following requirements:
Mens Razors | Womens Razors | |||||
Units produced and sold | 20,000 | 26,000 | ||||
Direct labor hours | 30 | 40 | ||||
Pounds of raw materials | 860 | 750 | ||||
Hours in design | 20 | 23 | ||||
Machine hours | 65 | 50 | ||||
What is the total manufacturing overhead assigned to the current order for Women's Razors if the firm uses a volume-based plant wide overhead rate based on direct labor hours?
Multiple Choice
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$150.00.
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$12,000.00.
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$112.50.
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$9,600.00.
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$187.50.
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