Precision Lens Company manufacturessophisticated lenses and mirrors used in large optical telescopes.The company is now preparing its annual profit plan. As part of itsanalysis of the profitability of individual products, thecontroller estimates the amount of overhead that should beallocated to the individual product lines from the followinginformation.
|
Mirrors
|
Lenses
|
|
Units produced
|
30
|
30
|
|
Material moves per product line
|
4
|
16
|
|
Direct-labor hours per unit
|
250
|
250
|
The total budgeted material-handling cost is $90,000.
Requirement 1:
Under a costing system thatallocates overhead on the basis of direct-labor hours, thematerial-handling costs allocated to one mirror would be what amount?