Harringer Co.has provided the following information for last year:
$$\begin{array} { | l | r | l | }
\hline \text { Gallons input } & 10,000 & @ \$ 20 \text { gallon } \
\hline \text { Labor costs } & 5,000 & @ \$ 20 \mathrm { hr } \
\hline \text { Overhead costs } & ? ? ? & \
\hline \text { Gallons finished } & 8,000 & \begin{array} { l }
@ \text { selling price of } \
\$ 5 5/\text { gallon }
\end{array} \
\hline \begin{array} { l }
\text { Total factor } \
\text { productivity }
\end{array} & 1.0732 & \
\hline
\end{array}$$The total overhead cost (rounded)is:
A) $172,200.
B) $109,989.
C) $140,000.
D) $200,000.

Question

Harringer Co.has provided the following information for last year: 
$$\begin{array} { | l | r | l | } 
\hline \text { Gallons input } & 10,000 & @ \$ 20 \text { gallon } \
\hline \text { Labor costs } & 5,000 & @ \$ 20 \mathrm { hr } \
\hline \text { Overhead costs } & ? ? ? & \
\hline \text { Gallons finished } & 8,000 & \begin{array} { l } 
@  \text { selling price of } \
\$ 5 5/\text { gallon }
\end{array} \
\hline \begin{array} { l } 
\text { Total factor } \
\text { productivity }
\end{array} & 1.0732 & \
\hline
\end{array}$$The total overhead cost (rounded)is:
A) $172,200.
B) $109,989.
C) $140,000.
D) $200,000.

Quizplus · Accepted Answer

The total factor productivity (TFP) is calculated as output value divided by input costs. Given TFP = 1.0732, we can set up the equation: $(8,000 \times 55) / (10,000 \times 20 + 5,000 \times 20 + \text{Overhead}) = 1.0732$. Solving for Overhead gives approximately $109,989.

Harringer Co The Total Overhead Cost (Rounded)is: A) $172,200

Harringer Co The Total Overhead Cost (Rounded)is:
A) $172,200