Shaver Co.manufactures a variety of electric razors for men and women.The company's plant is partially automated.Listed below is cost driver information used in the product-costing system:
In addition,Shaver expects to spend $514,368 for 8,037 direct labor-hours.Two current product orders had the following requirements:
Using ABC,how much facility-level overhead is assigned to the current order for Men's Razors?
A)$403.00.
B)$310.00.
C)$708.50.
D)$545.00.
E)$936.00.

Question

Shaver Co.manufactures a variety of electric razors for men and women.The company's plant is partially automated.Listed below is cost driver information used in the product-costing system: 
In addition,Shaver expects to spend $514,368 for 8,037 direct labor-hours.Two current product orders had the following requirements: 
Using ABC,how much facility-level overhead is assigned to the current order for Men's Razors?
A)$403.00. 
B)$310.00. 
C)$708.50. 
D)$545.00. 
E)$936.00.

Quizplus · Accepted Answer

Using ABC, the facility-level overhead is assigned based on the number of machine setups.

For Men's Razors:
Facility-level overhead = (3 machine setups x $235.50 per setup) = $706.50

Therefore, the facility-level overhead assigned to the current order for Men's Razors is $708.50, which is the closest answer choice.

Shaver CoManufactures a Variety of Electric Razors for Men and Women