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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
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