Whirlwind Fan Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct material cost is $85, and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows:
What is the cost of materials handling per ceiling fan? (Round any intermediate calculations and your final answer to two decimal places.)
A) $1.60
B) $6.00
C) $4.00
D) $10.00
A) $1.60
Explanation: Calculation of materials handling cost per unit:
Number of parts used 20
Materials handling cost per part $0.08
Materials handling cost per unit ($0.08 × 20) $1.60
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