Powers,Inc Calculate the Amount of Overhead to Be Allocated to Satchels,if

question 18

Multiple Choice

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. $$\begin{array} { | l | r | r | } \hline & \text { Totes } & \text { Satchels } \\\hline \text { Direct materials cost per unit } & \$ 32 & \$ 44 \\\hline \text { Direct labor cost per unit } & \$ 55 & \$ 62 \\\hline \text { Number of units } & 540 & 350 \\\hline\end{array}$$ 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

Understand the effect of changes in inventory levels on net operating income under absorption and variable costing.

Identify and calculate contribution margins and gross margins.

Understand and calculate the effects of fixed manufacturing overhead costs on net operating income.

Analyze the impact of selling price, variable cost, and fixed costs on net operating income.

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