Ultimate Vision Corporation Ultimate Vision Corporation has two product lines: LCD televisions and projection televisions.The company has budgeted the following production and overhead costs for the upcoming year:

LCD TV’s Projection TV’s

Units Produced 1,500 2,250

Direct labor hours per Unit 20 30

Material Moves per Product Line 15 20

Budgeted Materials Handling Cost $75,000

Total Machine Hours 10,000 16,000

Machine Maintenance Costs $180,000

Refer to Ultimate Vision Corporation.If the company uses total direct labor hours to allocate factory overhead,the machine maintenance cost allocated to LCD TV's would be: A)$51,923 B)$55,385 C)$69,231 D)$72,000

Question

Ultimate Vision Corporation
Ultimate Vision Corporation has two product lines: LCD televisions and projection televisions.The company has budgeted the following production and overhead costs for the upcoming year:

		LCD TV’s	Projection TV’s
Units Produced		1,500	2,250
Direct labor hours per Unit		20	30
Material Moves per Product Line		15	20
Budgeted Materials Handling Cost	$75,000
Total Machine Hours		10,000	16,000
Machine Maintenance Costs	$180,000

Refer to Ultimate Vision Corporation.If the company uses total direct labor hours to allocate factory overhead,the machine maintenance cost allocated to LCD TV's would be: A)$51,923 B)$55,385 C)$69,231 D)$72,000

Quizplus · Accepted Answer

To allocate factory overhead using total direct labor hours, we need to calculate the predetermined overhead rate by dividing the total budgeted overhead costs by the total budgeted direct labor hours. The predetermined overhead rate would be:

$1,475,382 / 26,666 = $55.385 per direct labor hour

Next, we need to allocate the machine maintenance cost to LCD TVs using the predetermined overhead rate and the budgeted direct labor hours for LCD TVs:

$55.385 x 1,000 = $55,385

Therefore, the machine maintenance cost allocated to LCD TVs would be $55,385.

Ultimate Vision Corporation Ultimate Vision Corporation Has Two Product Lines: LCD Televisions and LCD