wer Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system: Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system:
| Budgeted Overhead | Cost Driver | Estimated Cost Driver Level | ||
|---|---|---|---|---|
| Machine setups | $ 120,000 | Number of setups | 120 | setups |
| Materials handling | 104,400 | Number of barrels | 8,700 | barrels |
| Quality control | 264,000 | Number of inspections | 1,100 | inspections |
| Other overhead cost | 144,000 | Number of machine hours | 12,000 | machine hours |
| Total overhead | $ 632,400 |
A current product order has the following requirements:
| Machine setups | 8 | setups |
|---|---|---|
| Materials handling | 606 | barrels |
| Quality inspections | 80 | inspections |
| Machine hours | 830 | machine hours |
| Direct labor hour | 336 | hours |
Using activity-based costing, how much material handling overhead is assigned to the order?
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$19,200.
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$8,000.
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$11,108.
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$9,960.
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$7,272.
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