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Ches Channing Corporation makes two products (A1 and B2) that require direct materials, direct labor, and overhead. The following data refer to operations expected for
Ches 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 $260,000 $780,000 $1,040,000 110,000 220,000 330,000 72,000 171,000 243,000 102,300 97,200 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? % of direct-materials cost % of direct labor cost b. Predetermined rate Predetermined rate Total overhead (A1) Total overhead (B2) G. d
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