Bag Ladies,Inc Calculate the Amount of Overhead to Be Allocated to Totes

question 125

Multiple Choice

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 $24,500.Additional estimated information is given below. $$\begin{array} { | l | l | l | } \hline & \text { Totes } & \text { Satchels } \\\hline \text { Direct materials cost per unit } & \$ 31 & \$ 41 \\\hline \text { Direct labor cost per unit } & \$ 53 & \$ 63 \\\hline \text { Number of units } & \$ 00 & \$ 60 \\\hline\end{array}$$ 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) $462
• B) $333
• C) $11,299
• D) $13,202

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Definitions:

Rationing Function

The ability of market prices to allocate scarce resources efficiently among competing uses.

Incentive Function

The inducement that an increase in the price of a commodity gives to sellers to make more of it available (and conversely for a decrease in price), and the inducement that an increase in price offers to buyers to purchase smaller quantities (and conversely for a decrease in price).

Loan Period

The duration of time from the initiation of a loan to its final due date, within which the borrower is expected to repay the borrowed amount along with interest.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage rate.