Question

Bag​ Ladies, Inc. Manufactures two kinds of bags—totes and satchels. The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base. Estimated overhead costs for the year are​ $25,500. Additional estimated information is given below. Totes Satchels Direct materials cost per unit ​$33 ​$40 Direct labor cost per unit ​$53 ​$61 Number of units 530 360 Calculate the amount of overhead to be allocated to Totes.​ (Round any percentages to two decimal places and your final answer to the nearest​ dollar.)

Answer 1

Answer:

Allocated MOH= $14,312

Step-by-step explanation:

Giving the following information:

Estimated overhead costs for the year are​ $25,500.

Totes Satchels:

Direct labor cost per unit ​$53 ​$61

Number of units 530 360

First, we need to calculate the allocation rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 25,500 / (53*530 + 61*360)

Predetermined manufacturing overhead rate= 25,500/50,050

Predetermined manufacturing overhead rate= $0.5095 per direct labor dollar

Now, we can allocate overhead to Totes:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 0.5095*(53*530)

Allocated MOH= $14,311.855