Modiste 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 $24,250.Additional information is given below.
-Calculate the amount of overhead to be allocated to Satchels.
A)$36,000
B)$12,740
C)$10,500
D)$11,750

Question

Modiste 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 $24,250.Additional information is given below.  
-Calculate the amount of overhead to be allocated to Satchels.
A)$36,000 
B)$12,740 
C)$10,500 
D)$11,750

Quizplus · Accepted Answer

11ea84d1_116a_e1e3_83dc_db913073cf49_TB3006_00 Predetermined overhead allocation rate = $24,250 (Total estimated overhead costs)÷$48,500 (Total estimated quantity of the overhead allocation base)= 50% of direct labor cost.
Overhead allocated to Totes = $21,000 × 50% = $10,500