Marley Music produces toy instruments-trumpet and flute- for children.Molding costs are allocated to products based on a percentage of material costs.Molding costs of $15,000 per month are budgeted and the store anticipates spending $30,000 in materials.By the end of the month, it was determined that actual molding costs were $14,500.If the company spends $6.50 per trumpet for materials, and $3.50 per flute for materials, how much of the molding costs will be allocated to each trumpet?
A)$0.50
B)$0.48
C)$3.14
D)$3.25

Question

Quizplus · Accepted Answer

To allocate the molding costs to each trumpet, we need to calculate the percentage of material costs for each trumpet.

The total material costs for 1 trumpet is $6.50, and the total material costs for 1 flute is $3.50.

The total material costs for all products is:
(Number of trumpets x $6.50) + (Number of flutes x $3.50) = $30,000

Let's say the company produced t trumpets and f flutes. We can write two equations based on this information:

6.5t + 3.5f = 30,000 (total material cost equation)
Molding costs = 15,000 = x% of material costs (molding cost allocation equation)

We know that the actual molding costs were $14,500, which is less than the budgeted amount of $15,000. This means that the percentage used to allocate molding costs will be slightly higher than x%.

To solve for t, we need to isolate t in the total material cost equation:

6.5t + 3.5f = 30,000
6.5t = 30,000 - 3.5f
t = (30,000 - 3.5f)/6.5

Now we can substitute this expression for t into the molding cost allocation equation:

14,500 = x% * 30,000
x% = 14,500/30,000
x% = 0.4833...

This means that the percentage used to allocate molding costs is approximately 48.33%.

To find the amount of molding costs allocated to each trumpet, we multiply the total material cost of each trumpet by the percentage allocated to molding costs:

Molding cost per trumpet = $6.50 * 0.4833... * 48.33% = $3.25

Therefore, the answer is D) $3.25.

Marley Music Produces Toy Instruments-Trumpet and Flute- for Children