Question
Swifty manufactures mattresses for the hotel industry. It has two products, Downy and Firm and total overhead of $504000. The company plans to manufacture 210
Swifty manufactures mattresses for the hotel industry. It has two products, Downy and Firm and total overhead of $504000. The company plans to manufacture 210 Downy mattresses and 320 Firm mattresses this year. In manufacturing the mattresses, the company must perform 750 material moves for the Downy and 250 for the Firm; it processes 120 purchase orders for the Downy and 80 for the Firm; and the companys employees work 3200 direct labour hours on the Downy product and 3800 on the Firm. Swiftys total material handling costs are $305000 and its total purchasing costs are $199000. Using ABC, how much overhead would be assigned to the Downy product?
$504000
$348150
$252000
$155850
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