Question -
A company manufactures and sells two styles of class rings: standard and deluxe. The company utilizes an activity-based costing system.
The company compiles the following information relating to the budgeted production activity for the upcoming month:
Product
|
Units
|
Lbs. of Material
|
Standard ring
|
32,000
|
1,200
|
Deluxe ring
|
18,000
|
700
|
Total
|
50,000
|
1,900
|
Activity
|
Overhead Costs
|
Identification Cost Driver
|
Materials handling
|
$22,800
|
bs. Of materials
|
What amount of materials handling overhead cost should be allocated to the deluxe ring?