A company incurs $4,050,000 of overhead each year in three departments: Ordering

Question

A company incurs $4,050,000 of overhead each year in three departments: Ordering and Receiving Mixing, and Testing. The company prepares 2,000 purchase orders, works 50,000 mixing hours, and performs 1,500 tests per year in producing 200,000 drums of Goo and 600,000 drums of Slime. The following data are available Cost 3,000 500 650 Department Expected use of D iver 1,000 100 350 Ordering and Receiving Mixing Testing Production information for Slime is as follows Department Ordering and Receiving Mixing Testing Expected use of Driver 1,600 30,000 1,000 Compute the amount of overhead assigned to Slime a. $2,025,000 b. $2,467,851 c. $2,760,000 d. $3,037,500

Explanation / Answer

d $3,037,500

working note:

Total overhead incurred $4,050,000 for 200,000 drumsf Goo and 60,000 drums of Slime.

hence Overhead asigned to Slime = ($4,050,000/80,000)*60,000 = $3,037,500

                            

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.