Mission Company Is Preparing Its Annual Profit Plan (CMA Based) Under a Traditional Costing System That Allocates Overhead

Mission Company 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 allocated to the individual product lines from the information provided below.
$$\begin{array} { | l | l | l | } \hline & \begin{array} { l } \text { Wall } \\\text { Miirors }\end{array} & \begin{array} { l } \text { Specialty } \\\text { Windows }\end{array} \\\hline \text { Units Produced } & 40 & 20 \\\hline \begin{array} { l } \text { Material moves per product } \\\text { line }\end{array} & 5 & 15 \\\begin{array} { l } \text { Direct labor hours per } \\\text { product line }\end{array} & 200 & 300 \\\hline{ \text { Budgeted material handling costs: } \$ 50,000 } \\\hline\end{array}$$
(CMA based) Under a traditional costing system that allocates overhead on the basis of direct labor hours,the materials handling costs allocated to one unit of specialty windows would be:

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

Correct Answer:

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