Question

​Bella, Inc. manufactures two kinds of bagslong dashtotes 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 comma 750. Additional estimated information is given below. Totes Satchels Direct materials cost per unit $ 31 $ 41 Direct labor cost per unit $ 51 $ 63 Number of units 500 360 Calculate the predetermined overhead allocation rate.​ (Round your answer to two decimal​ places.)

Answer 1

Answer:

51.369%

Explanation:

Given that,

Estimated overhead costs for the year = $24,750

Totes:

Direct materials cost per unit = $31

Direct labor cost per unit = $51

Number of units = 500

Satchels:

Direct materials cost per unit = $41

Direct labor cost per unit = $63

Number of units = 360

Estimated direct labor:

=  (Direct labor cost per unit × No. of units) of Totes +  (Direct labor cost per unit × No. of units) of Satchels

= ($51 × 500) + ($63 × 360)

= $25,500 + $22,680

= $48,180

Predetermine overhead allocation rate:

$=\frac{Estimated\ Overhead}{Estimated\ direct\ Labor}\times 100$

$=\frac{24,750}{48,180}\times 100$

= 51.369%