Question

Starbright manufactures children car seats, strollers, and baby swings. Starbright’s manufacturing costs are budgeted as follows:

Factory utilities $105,000
Factory foremen salaries $75,000
Machinery setup costs $30,000
Total manufacturing overhead $210,000

The company uses activity-based costing to allocate its manufacturing overhead costs to products based on the following schedule:

Overhead Cost	Allocation Base	Estimated Activity Level
Factory Utilities	Direct labor hours	14,258
Factory foremen salaries	Machine hours	21,000
Setup costs	Number of production runs	83

During the current month, the following levels of activities were incurred:

	Car Seats			Strollers			Baby Swings			Total
Direct Labor Costs	$	55,425		$	84,423		$	31,258		$	171,106
Direct Labor Hours		4,619			7,035			2,604			14,258
Machine Hours		7,500			10,250			3,250			21,000
Production Runs		25			40			18			83
Units Produced		1,500			2,500			750			4,750

What are the total manufacturing overhead costs allocated to the Baby Swings for the current month? (Do not round intermediate calculations. Round your answer to the nearest dollar.)

Answer 1

Calculation of total manufacturing overhead costs allocated to the Baby Swings

Particular	Amount ($)
Factory Utilities [($105,000 / 14,258 D.L hrs) * 2,604 D.L hrs]	19,176.60
Factory foremen salaries[($75,000 / 21,000 M. hrs) * 3,250 M.hrs]	11,607.14
Machinery setup costs [($30,000 / 83 P.runs) * 18 P.runs	6,506.02
Total manufacturing overhead costs allocated to the Baby Swings	$37,289.76 or $37,290