Tacoma Accessories makes two laptop cases, Plastic and Leather, that require direct materials, direct labor, and overhead. The following data refer to operations expected for next quarter: Revenue Direct material Direct labor Overhead: Material handling overhead Fabrication overhead Plastic $ 640,000 340,000 220,000 Leather $ 660,000 420,000 200,000 Total $ 1,300,000 760,000 420,000 319,200 525,000 Tacoma uses a two-stage cost allocation system: It uses direct-material costs to allocate material handling overhead and direct-labor costs to allocate fabrication overhead costs. Required: a. Compute the material handling overhead rate for next quarter. b. Compute the fabrication overhead rate for next quarter. c. What is the total overhead allocated to the Plastic case next quarter? d. What is the total overhead allocated to the Leather case next quarter? a. Material handling predetermined rate b. Fabrication predetermined rate c. Total overhead (Plastic) d. Total overhead (Leather) % of direct-materials cost % of direct-labor cost
Tacoma Accessories makes two laptop cases, Plastic and Leather, that require direct materials, direct labor, and overhead. The following data refer to operations expected for next quarter: Revenue Direct material Direct labor Overhead: Material handling overhead Fabrication overhead Plastic $ 640,000 340,000 220,000 Leather $ 660,000 420,000 200,000 Total $ 1,300,000 760,000 420,000 319,200 525,000 Tacoma uses a two-stage cost allocation system: It uses direct-material costs to allocate material handling overhead and direct-labor costs to allocate fabrication overhead costs. Required: a. Compute the material handling overhead rate for next quarter. b. Compute the fabrication overhead rate for next quarter. c. What is the total overhead allocated to the Plastic case next quarter? d. What is the total overhead allocated to the Leather case next quarter? a. Material handling predetermined rate b. Fabrication predetermined rate c. Total overhead (Plastic) d. Total overhead (Leather) % of direct-materials cost % of direct-labor cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Vikram
Transcribed Image Text:Tacoma Accessories makes two laptop cases, Plastic and Leather, that require direct materials, direct labor, and overhead. The
following data refer to operations expected for next quarter:
Revenue
Direct material
Direct labor
Overhead:
Material handling overhead
Fabrication overhead
Plastic
$ 640,000
340,000
220,000
Leather
$ 660,000
420,000
200,000
Total
$ 1,300,000
760,000
420,000
319,200
525,000
Tacoma uses a two-stage cost allocation system: It uses direct-material costs to allocate material handling overhead and direct-labor
costs to allocate fabrication overhead costs.
Required:
a. Compute the material handling overhead rate for next quarter.
b. Compute the fabrication overhead rate for next quarter.
c. What is the total overhead allocated to the Plastic case next quarter?
d. What is the total overhead allocated to the Leather case next quarter?
a. Material handling predetermined rate
b. Fabrication predetermined rate
c. Total overhead (Plastic)
d. Total overhead (Leather)
% of direct-materials cost
% of direct-labor cost
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