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Cost Allocation for Kleyman Company

The controller of Kleyman Company estimates the amount of materials handling overhead cost that should be allocated to the company's two products using the data that are given below:

Wall Mirrors Specialty Windows
Total expected units produced 8,000 7,000
Total expected material moves 300 900
Expected direct labor-hours per unit 5 7

The total materials handling cost for the year is expected to be 34,600.
Reference: 8-11

If the materials handling cost is allocated on the basis of direct labor-hours, how much of the total materials handling cost should be allocated to the wall mirrors? (Round off your answer to the nearest whole dollar.)


Solution Summary

The solution explains the calculation of cost allocation given the allocation base in a brief calculation.