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Shaver Co. manufactures a variety of electric razors for men and women. The company's plant is...

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:

Overhead Cost Pool Budgeted Overhead Cost Budgeted Cost Driver Level Cost Driver
Machinery depreciation/maintenance $ 170,142 24,306 Machine hours
Factory depreciation/utilities/insurance 121,530 24,306 Machine hours
Product design 636,300 36,000 Hours in design
Material handling 1,441,800 162,000 Pounds of raw materials

In addition, Shaver expects to spend $486,120 for 8,102 direct labor-hours. Two current product orders had the following requirements:

Men’s Razors Women’s Razors
Units produced and sold 24,000 32,000
Direct labor hours 30 40
Pounds of raw materials 621 511
Hours in design 20 23
Machine hours 67 52

Using ABC, how much batch-level overhead is assigned to the current order for Women's Razors based on pounds of raw materials?

Multiple Choice

  • $4,548.

  • $4,801.

  • $4,260.

  • $13,610.

  • $6,089.

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Homework Answers

Answer #1

The correct answer is $ 4548

Explanation and calculation

Overheads assigned = Pounds of raw material for women razor * activity rate

= 511*(1441800/162000)

= 511*8.9

=$4548

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