11 June, 10:17

# The Sit-N-Spin Corporation manufactures and assembles office chairs. Sit-N-Spin uses an activity-based costing system to allocate all manufacturing conversion costs. Each chair consists of 10 separate parts totaling \$165 in direct materials, and requires 5.0 hours of machine time to produce. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts \$2.75 per part Machining Machine hours \$5.00 per machine hour Assembling Number of parts \$1.50 per part Packaging Number of finished units \$3.75 per finished unitWhat is the cost of materials handling per chair

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1. 11 June, 11:52
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Materials handling Allocation = \$27.5

Explanation:

Giving the following information:

Each chair consists of 10 separate parts totaling \$165 direct materials and requires 5.0 hours of machine time to produce.

Materials handling = \$2.75 per part

Machining = \$5.00 per machine hour

Assembling = \$1.50 per part

Packaging = \$3.75 per finished unit

Material Handling allocation base is: Number of parts.

Allocation = 10 parts * \$2.75 = \$27.5