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Towell Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its
Towell Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual 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 lines from the following information Lenses Mirrors Units produced 25 25 Material moves per product line .125 375 Direct-labor hours per unit. 200 200 son The total budgeted material handling cost is $50,000. Required: 1. Under the traditional costing system that allocates overhead on the basis of direct-labor hours, the material handling costs allocated to one lens would be $2,500 per unit $1,000 per unit $1,640 per unit $2,000 per unit on the material handling costs allocated to one lens would be 11 2. Under activity-based costing (ABC), the material handling costs allocated to one lens would be $500 per unit $100 per unit $125 per unit $1,500 per unit al costing system that allocates overhead on the basis of direct-labor hours, the handling costs allocated to one mirror would be: : 3. Under the traditional costing system that allocates overhead on the basis of direct-labor hours, the material handling costs allocated to one mirror would be: $1,640 per unit $2,500 per unit $1,000 per unit $2,000 per unit 4.. Under activity-based costing (ABC), the mater $cated to one mirror would be: 4.. Under activity-based costing (ABC), the material-handling costs allocated to one mirror would be: $100 per unit $1,500 per unit $500 per unit $375 per unit
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