Mask Company Manufactures Two Products, Pillows and Comforters

question 138

Multiple Choice

Mask Company manufactures two products, pillows and comforters.The company has estimated its overhead in the order-processing department to be $480,000.The company produces 50,000 pillows and 80,000 comforters each year.Pillow production requires 25,000 machine hours, comforter production requires 50,000 machine hours.The company places raw materials orders 10 times per month, 2 times for raw materials for pillows and the remainder for raw materials for comforters.How much of the order processing overhead should be allocated to comforters?

• A)$240,000
• B)$320,000
• C)$295,386
• D)$384,000

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Definitions:

Capital Gains

The profit earned from selling an asset for more than its original purchase price.

Total Returns

The overall return on an investment, including both capital gains and income, over a specific period.

Common Stock

An ownership stake in a corporation that provides the shareholder with voting capabilities and a claim on the company's profits through dividends.

Stock Of Small Firms

Stock Of Small Firms refers to the equity securities issued by companies with a small market capitalization, often characterized by higher volatility and potentially higher growth prospects than larger companies' stocks.