Haskins Company employs material handling employees who move materials between production divisions at a labor cost of $360,000 a year.It is estimated that these employees move 600,000 pounds of material per year.If 60,000 pounds are moved in March,how much of the material handling cost should be assigned to products made in March? (Do not round your intermediate calculations. )
A) $36,000
B) $24,000
C) $50,000
D) $38,000

Question

Quizplus · Accepted Answer

Allocation rate = Total cost to be allocated ÷ Cost driver (allocation base)
Allocation rate = $360,000 ÷ 600,000 lbs.= $0.60 per lb.
Allocation per cost object = Allocation rate x Weight of the cost driver for that cost object
Allocation of material handling cost in March = $0.60 per lb.x 60,000 lbs.= $36,000

Haskins Company Employs Material Handling Employees Who Move Materials Between