Channing Corporation manufactures two products (A1 and B2) that require direct materials, direct labor, and overhead. The
Question:
Channing Corporation manufactures two products (A1 and B2) that require direct materials, direct labor, and overhead. The following data refers to the operations planned for the next month.
A1 | B2 | Total | |||||||||||
Revenue | ps | 100,000 | ps | 300.000 | ps | 400.000 | |||||||
direct material | 30,000 | 60.000 | 90.000 | ||||||||||
Direct labour | 40.000 | 95,000 | 135.000 | ||||||||||
General expenses: | |||||||||||||
Related to direct material | 13,500 | ||||||||||||
Related to direct labor | 40.500 | ||||||||||||
Required:
Channing uses a two-stage cost allocation system. It uses direct material costs to allocate overhead costs related to direct materials and direct labor costs to allocate overhead costs related to direct labor.
to. Calculate the rate of overhead costs related to direct materials for the next month.
b. Calculate the rate of overhead costs related to direct labor for the next month.
C. What is the total overhead cost assigned to product A1 next month?
d. What is the total overhead cost assigned to product B2 next month?
to. default rate | ?? | % of direct material costs |
b. default rate | ?? | % of direct labor cost |
C. Total overhead (A1) | ?? | |
d. Total overhead (B2) | ?? |
Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher