Crinkle Cut Clothes Company manufactures two products CC1 and CC2. Current direct material and direct...
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Accounting
Crinkle Cut Clothes Company manufactures two products CC1 and CC2. Current direct material and direct labor costs are detailed below. Next year the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next year's overhead is estimated to be $580,400. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $20 per hour and the company expects to manufacture 35,000 units of CC1 and 104,000 units of CC2 next year.
| Direct Material per Unit | Direct Labor Dollars per Unit | |||||
| CC1 | $ | 38.40 | $ | 17.60 | ||
| CC2 | $ | 26.50 | $ | 16.40 | ||
Compute the plantwide overhead rate for next year.
Multiple Choice
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$20.00 per DLH.
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$1.92 per DLH.
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$34.00 per DLH.
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$0.89 per DLH.
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$5.00 per DLH.
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