Question

​Bella, 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​ $25,250. Additional estimated information is given below.

	Totes	Satchels
Direct materials cost per unit	​$33	​$45
Direct labor cost per unit	​$50	​$65
Number of units	500	390

Calculate the predetermined overhead allocation rate.​ (Round your answer to two decimal​ places.)

Answer 1

Answer:-

Description	Direct labor cost per unit	Number of unit	Total direct labor cost
Totes	50	500	25000
Satchels	65	390	25350
Total			50350

Predetermined overhead allocation rate= Total estimated overhead cost/ Total estimated quantity of the overhead allocation base

predetermined overhead allocation rate = 25250/50350=50.15%

Thus 50.15% of direct labor cost

Manufacturing overhead cost allocated to totes=50.15%*25000=12537.5

Manufacturing overhead cost allocated to be satchels =50.15%*25350==12713.025