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 $24,500.Additional estimated information is given below. $$\begin{array} { | l | l | l | }
\hline & \text { Totes } & \text { Satchels } \
\hline \text { Direct materials cost per unit } & \$ 31 & \$ 41 \
\hline \text { Direct labor cost per unit } & \$ 53 & \$ 63 \
\hline \text { Number of units } & 500 & \$ 60 \
\hline
\end{array}$$ 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.)

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 $24,500.Additional estimated information is given below. $$\begin{array} { | l | l | l | } 
\hline & \text { Totes } & \text { Satchels } \
\hline \text { Direct materials cost per unit } & \$ 31 & \$ 41 \
\hline \text { Direct labor cost per unit } & \$ 53 & \$ 63 \
\hline \text { Number of units } & 500 & \$ 60 \
\hline
\end{array}$$ 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.)

Quizplus · Accepted Answer

The total direct labor cost is calculated as (500 units * $53) + (60 units * $63) = $26,790. The overhead rate is $24,500 / $26,790 = 0.9145. The overhead allocated to Totes is 500 units * $53 * 0.9145 = $24,500 * ($26,500 / $26,790) = $13,202.

Bag Ladies,Inc Calculate the Amount of Overhead to Be Allocated to Totes