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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
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. Revenue Direct material Direct labor Overhead: Direct-material related Direct-labor related Al B2 Total $300,000 $900,000 $1,200,000 130,00 260, eee 390,000 89,000 198,080 270,000 136,500 129,680 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? a. % of direct-materials cost % of direct-labor cost b. Predetermined rate Predetermined rate Total overhead (A1) Total overhead (B2) c. d
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