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.

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. )
A)$500
B)$330
C)$11,556
D)$13,945

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.

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. )

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. )
A)$500 
B)$330 
C)$11,556 
D)$13,945

Quizplus · Accepted Answer

11ea8a42_4fb1_d368_8b44_59a61ab5dc59_TB5024_00 
Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base = $25,500 / $49,430 = 51.59% of direct labor cost.
Manufacturing overhead cost allocated to Totes = $27,030 × 51.59% = $13,945