ShippersRUs provides logistic support services for on-line merchants. The company maintains warehouses that stock items...
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ShippersRUs provides logistic support services for on-line merchants. The company maintains warehouses that stock items carried by the on-line clients. When a client receives an order from a customer, the order is forwarded to ShippersRUs, which pulls the item from storage, packs it and ships it to the customer. The compay uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 110,000 items were shipped to customers using 2,200 direct labor-hours. The company incurred a total of $8,400 in variable overhead costs. According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.25 per direct labor-hour. What is the standard variable overhead cost allowed to ship 70,000 items to customers?
ShippersRUs provides logistic support services for on-line merchants. The company maintains warehouses that stock items carried by the on-line clients. When a client receives an order from a customer, the order is forwarded to ShippersRUs, which pulls the item from storage, packs it and ships it to the customer. The compay uses a predetermined variable overhead rate based on direct labor-hours.
In the most recent month, 110,000 items were shipped to customers using 2,200 direct labor-hours. The company incurred a total of $8,400 in variable overhead costs.
According to the company's standards, 0.03 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $2.25 per direct labor-hour.
What is the standard variable overhead cost allowed to ship 70,000 items to customers?
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