Windsor Co If Traditional Costing Based on Direct Labor Hours Is Used

question 115

Multiple Choice

Windsor Co.incurs $1,050,000 of overhead costs each year in its three main departments, machining ($600,000) , inspections ($300,000) and packing ($150,000) .The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year.Information about Windsor's two products is as follows: $$\begin{array} { l c c } & \text { Product } & \text { ProductY } \\\text { Machining hours } & 1,000 & 3,000 \\\text { Inspections } & 100 & 500 \\\text { Orders packed } & 350 & 650 \\\text { Direct labor hours } & 1,700 & 1,800\end{array}$$ If traditional costing based on direct labor hours is used, how much overhead is assigned to Product X this year?

• A)$252,501
• B)$363,462
• C)$510,000
• D)$525,000

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Definitions:

Sole Benefit

Refers to a financial or legal benefit intended exclusively for an individual or specific party.

Bailee

An individual or entity given temporary possession but not ownership of personal property by a bailor.

Bailed Property

Property given into the custody of another, termed the bailee, for a specific purpose under a contract.

Mutual Benefit

Refers to actions or policies that provide advantages or positive outcomes to all involved parties.