Question

Each multiple choice question is worth 2 points for a total of 64 points. 1) 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 $26,000. Additional estimated information is given below Totes Satchels Direct materials cost per unit Direct labor cost per unit Number of units $4 $6 390 53 510 Calculate the predetermined overhead allocation rate. (Round your answer to two decimal places.) A) 92.69% B) 49.41% C) 94.50% D) 1.58% 2) 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. TotesSatchels Direct materials cost per unit Direct labor cost per unit Number of units $3 $51 530 $4 350 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

Answer 1

1) Total direct labour cost-Respective direct labour cost*Number of units Total direct labour cost for Totes 55 *510 -$28050 Total direct labour cost for Satchels -63 390 -$24570 Total direct labour cost-$52620 Hence predetermined overhead rate 26000/52620 49.41 %( Approx) Option (B) is the correct.

2) Totes 51*530 -27030 Satchels-350*64 22400 Total-27030+22400 49430 Overhead allocated to totes 25500/49430 *27030 = 13945 Option (D) is the correct.