Question

Merone Company allocates materials handling cost to the company's two products using the below data: Modular Homes Prefab Barns Total expected units produced 5,800 8,800 Total expected material moves 580 180 Expected direct labor-hours per unit 780 280 The total materials handling cost for the year is expected to be $349,400. If the materials handling cost is allocated on the basis of material moves, the total materials handling cost allocated to the modular homes is closest to: (Round your intermediate calculations to 4 decimal places.)

Answer 1

Answer:

$266,647

Explanation:

Total Moves = sum of total expected material moves of modular homes and prefab barns  

                    = 580 + 180

                    = 760 Moves

Material handling cost allocated to Modular homes:

= (Expected total materials handling cost ÷ Total moves) ×  total expected material moves of modular homes

= ($349,400 ÷ 760) × 580

= $266,647

If the materials handling cost is allocated on the basis of material moves, the total materials handling cost allocated to the modular homes is closest to: $266,647