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Plata Company produces two products: a mostly handcrafted soft leather briefcase sold under the label Maletin Elegant and a leather briefcase produced largely through automation
Plata Company produces two products: a mostly handcrafted soft leather briefcase sold under the label Maletin Elegant and a leather briefcase produced largely through automation and sold under the label Maletin Fina. The two products use two overhead activities, with the following costs: The controller has collected the expected annual prime costs for each briefcase, the machine hours, the setup hours, and the expected production. Required: 1. Conceptual Connection: Do you think that the direct labor costs and direct materials costs are accurately traced to each briefcase? Explain. Yes. Because direct materials and direct labor are directly traceable to each product, their cost assignment should be accurate. 2. Calculate the consumption ratios for each activity. Round to two decimal places. 3a. Calculate the overhead cost per unit for each briefcase by using a plantwide rate based on direct labor costs. Round rates to the nearest cent
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