Swimm Company allocates materials handling cost to the company's two products using the below data: The total materials handling cost for the year is expected to be $72,065. 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:
A)$36,033
B)$57,652
C)$56,051
D)$35,175

Question

Swimm Company allocates materials handling cost to the company's two products using the below data:  The total materials handling cost for the year is expected to be $72,065. 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:
A)$36,033 
B)$57,652 
C)$56,051 
D)$35,175

Quizplus · Accepted Answer

Activity rate = $72,065 ÷ (400 material moves + 100 material moves)= $144.13 per material move
Materials handling cost allocated to Modular Homes = $144.13 per material move × 400 material moves = $57,652

Swimm Company Allocates Materials Handling Cost to the Company's Two