Flagler Corporation Is Preparing Its Annual Profit Plan Under a Costing System That Assigns Overhead on the Basis

Flagler Corporation is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be assigned to the individual product lines from the information given as follows: $\begin{array}{lll}&\text { Wall Mirrors } &\text { Specialty Windows }\\\hline \text { Units produced } & 25 & 25 \\\text { Material moves per product line } & 5 & 15 \\\text { Direct labour hours per unit } & 200 & 200\\\text { Budgeted materials handling costs are }&\$50,000\end{array}$ Under a costing system that assigns overhead on the basis of direct labour hours, the materials handling costs allocated to one unit of wall mirrors would be:

A) $1,000
B) $500
C) $2,000
D) $5,000

Correct Answer:

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