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Find how much overhead would be assigned to downy product

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Sunland manufactures mattresses for the hotel industry. It has two products, Downy and Firm, and total overhead of $492000. The company plans to manufacture 190 Downy mattresses and 310 Firm mattresses this year. In manufacturing the mattresses, the company must perform 690 material moves for the Downy and 320 for the Firm; it processes 118 purchase orders for the Downy and 89 for the Firm; and the company's employees work 2500 direct labour hours on the Downy product and 3500 on the Firm. Sunland's total material handling costs are $304000 and its total purchasing costs are $188000.

Question 1: Under a traditional costing approach based on direct labour hours, how much overhead would be assigned to the Downy product?

Option 1: $205000

Option 2: $246000

Option 3: $287000

Option 4: $344400

Reference no: EM132541177

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