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. Totes Satchels Direct materials cost per unit $33 $40 Direct labor cost per unit $53 $61 Number of units 530 360 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.)

Allocated MOH= $14,312

Step-by-step explanation:

Giving the following information:

Estimated overhead costs for the year are $25,500.

Totes Satchels:

Direct labor cost per unit $53 $61

Number of units 530 360

First, we need to calculate the allocation rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 25,500 / (53*530 + 61*360)

Predetermined manufacturing overhead rate= 25,500/50,050

Predetermined manufacturing overhead rate= $0.5095 per direct labor dollar

Now, we can allocate overhead to Totes:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 0.5095*(53*530)

Allocated MOH= $14,311.855

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