Powers,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 Satchels,if the actual units produced and direct labor costs equal the estimated amounts.(Round any percentages to two decimal places and your final answer to the nearest dollar. )
A)$464
B)$14,734
C)$10,765
D)$21,700

Question

Powers,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 Satchels,if the actual units produced and direct labor costs equal the estimated amounts.(Round any percentages to two decimal places and your final answer to the nearest dollar. )
A)$464 
B)$14,734 
C)$10,765 
D)$21,700

Quizplus · Accepted Answer

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Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base = $25,500 / $51,400 = 49.61% of direct labor cost
Manufacturing overhead cost allocated to Satchels = $21,700 × 49.61% = $10,765