Bata Corporation is one of the largest producers of footwear in the world. It specializes in both traditional leather footwear and modern non-leather footwear. The company has two separate producing departments for two categories of footwear. In addition, there are two service departments, building services and materials receiving and handling. The company uses different indirect material components apart from leather and rexine.

The non-leather, rexine-based footwear division is highly automated. The manufacturing costs primarily depend on the number of subcomponents in each pair of footwear. In contrast, the traditional leather-based footwear division relies primarily on a large labor force to hand-assemble the products. Its costs depend on direct-labor hours. 

The costs of building services depend primarily on the square footage occupied. 

The costs of materials receiving and handling depend primarily on the total number of components handled. 

Shoes N1 and N2 are produced in the traditional leather footwear department and F1 and F2 are produced in the modern non-leather footwear department. 

Data about these products follow:

Budget figures for 2020 include the following: 

1. Allocate the costs of the service departments using the direct method. 

2. Using the results of number 1, compute the cost per direct-labor hour in the leather shoes department and the cost per component in the non-leather shoes department. 

3. Using the results of number 2, compute the cost per unit of product for shoes N1, N2, F1, and F2.

Transcribed Image Text:

N1 N2 F1 F2 Direct- Materials Cost CHF74 86 63 91 Number of Components 11 9 10 20 Direct- Labor Hours 2.4 4.8 1.2 0.8