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2.3 A furniture company manufactures four products; chairs, office tables, computer tables, and book shelves. Three departments, cutting, painting, and assembly are used in making
2.3 A furniture company manufactures four products; chairs, office tables, computer tables, and book shelves. Three departments, cutting, painting, and assembly are used in making these products. Direct material cost/unit for chairs, office tables, computer tables, and book shelves is $47, $30, $51, and $65 respectively. Direct labor hours used for each product in all the departments are as follows: Direct Labor Hours Unit Cutting Painting Product Assembly 2.0 1.25 Chair Office Table Computer Table Book Shelf 1.5 1.3 1.8 2.0 0.75 0.6 1.0 1.2 1.85 2.15 Annual overhead for all three departments is $326,750. Direct labor cost for cutting, painting and assembly departments are $16, $12, and $14 per hour respectively. Annual production is chairs, 1500; office tables, 650; computer tables, 1000; book shelves, 1200. (a) Determine total cost of manufacturing a book shelf using direct labor cost for allocation of overhead. ($231.01) (b) Determine total cost of a computer table using direct labor hours for allocation of overhead. used for (c) If a chair is sold for $219.99, determine the profit per chair if direct material cost is allocation of overhead.($41.90)
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