a. 

The controller of the Ferrence Company estimates the amount of material handling overhead that should be allocated to the company's two products using the data given below:

	wall mirrors	special windows
Total expected units produced	11600	1960
Total expected material movements	1160	1860
Expected direct labor hours per unit	14	5

The total material handling cost for the year is expected to be $16,638.70.

1.  If the material handling cost is assigned on the basis of direct labor hours, the total material handling cost assigned to the wall mirrors is the closest to:

2. The controller of the Ferrence Company estimates the amount of material handling overhead that should be allocated to the company's two products using the data given below:

	wall mirrors	special windows
Total expected units produced	12300	1880
Total expected material movements	1230	1780
Expected direct labor hours per unit	12	6

The total material handling cost for the year is expected to be; 

3.  If the material handling cost is assigned on the basis of material movements, the total material handling cost assigned to the special windows is the closest to:

 

b.

Bevard Nuptial Bakery makes elaborate custom wedding cakes. The company has an activity-based costing system with three activity cost pools. The activity fee for the size-related activity cost pool is $0.83 per guest. (The larger the number of guests, the larger the cake will be.) The activity rate for the complexity-related cost pool is $31.89 per tier. (Cakes with more levels are more complex.) Finally, the activity rate for the order-related activity cost pool is $82.34 per order. (Every wedding involves a cake order.) Activity fees include the costs of raw materials such as flour, sugar, eggs, and shortening.

Data relating to two recent orders appear below:

	Euertz Boda	Wedding Space
Number of guests at the reception	72	189
Number of levels in the cake	8	13
Cost of decorations purchased for the cake.	24.20	79.65

Assuming the company charges $787.41 for Sparacio's wedding cake, what would be the total margin on the order?

Answer rating: 100% (QA)

a 1 To allocate the material handling cost based on direct labor hours we need to calculate the direct labor hours for each product and then allocate the cost proportionally For wall mirrors Total exp... View the full answer