Channing Corporation makes two products (A1 and B2) that require direct materials, direct labor, and overhead. The following data refer to operations expected for next month. A1 B2 Total Revenue $ 230,000 $ 690,000 $ 920,000 Direct material 95,000 190,000 285,000 Direct labor 66,000 156,750 222,750 Overhead: Direct-material related 79,800 Direct-labor related 75,735 Required: Channing uses a two-stage cost allocation system, It uses direct-material costs to allocate direct-materials related overhead and direct-labor costs to allocate direct-labor related overhead costs. a. Compute the direct-material related overhead rate for next month. b. Compute the direct-labor related overhead rate for next month. c. What is the total overhead allocated to product A1 next month? d. What is the total overhead allocated to product B2 next month?
Channing Corporation makes two products (A1 and B2) that require direct materials, direct labor, and overhead. The following data refer to operations expected for next month. A1 B2 Total Revenue $ 230,000 $ 690,000 $ 920,000 Direct material 95,000 190,000 285,000 Direct labor 66,000 156,750 222,750 Overhead: Direct-material related 79,800 Direct-labor related 75,735 Required: Channing uses a two-stage cost allocation system, It uses direct-material costs to allocate direct-materials related overhead and direct-labor costs to allocate direct-labor related overhead costs. a. Compute the direct-material related overhead rate for next month. b. Compute the direct-labor related overhead rate for next month. c. What is the total overhead allocated to product A1 next month? d. What is the total overhead allocated to product B2 next month?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Channing Corporation makes two products (A1 and B2) that require direct materials, direct labor, and overhead . The following data refer to operations expected for next month.
| A1 | B2 | Total | |||||||
| Revenue | $ | 230,000 | $ | 690,000 | $ | 920,000 | |||
| Direct material | 95,000 | 190,000 | 285,000 | ||||||
| Direct labor | 66,000 | 156,750 | 222,750 | ||||||
| Overhead: | |||||||||
| Direct-material related | 79,800 | ||||||||
| Direct-labor related | 75,735 | ||||||||
Required:
Channing uses a two-stage cost allocation system, It uses direct-material costs to allocate direct-materials related overhead and direct-labor costs to allocate direct-labor related overhead costs.
a. Compute the direct-material related overhead rate for next month.
b. Compute the direct-labor related overhead rate for next month.
c. What is the total overhead allocated to product A1 next month?
d. What is the total overhead allocated to product B2 next month?
|
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