b. Select the appropriate cost drivers for the indirect costs and allocate these cost to department M and N

c. Determine the total estimated cost of the products made in Department M and N. Assume that Mogoul produced 2,000 units of product M and 4000 units of product N during the year. If Mogoul prices its products at cost plus 40 percent of cost, what price per unit must it charge for product M and for product N?

Student Name: Ana Galdamez Class: Manageial Accounting Problem 04-17A MOGOUL MANUFACTURING COMPANY a. Cost Assignment: Cost Assignment Categories Salary of V. P. of production division Salary of supervisor Department M Salary of supervisor Department N Direct materials cost Department M Direct materials cost Department N Direct labor cost Department M Direct labor cost Department N Direct utilities cost Department M Direct utilities cost Department N General factorywide utilities Production supplies Fringe benefits Depreciation Total Costs Dept. M $ Dept. N Indirect $ 200,000 80,000 $ 60,000 300,000 420,000 240,000 680,000 120,000 24,000 36,000 36,000 138,000 720,000 $ 740,000 $ 1,184,000 $ 1,130,000 Correct! Correct! Correct! b. Total Estimated Cost of Products: Indirect Costs Salary of VP Salary of VP General utilities General utilities Production supplies Production supplies Fringe benefits Fringe benefits Depreciation Depreciation Total allocated cost Allocation Rate Weight of Base M N c. Price per Unit: Department Total direct cost Total indirect cost Total production costs Number of units Cost per unit Price 2,000 4,000 Allocated to Dept. M Allocated to Dept. N Given Data P04-17A: MOGOUL MANUFACTURING COMPANY Annual Costs Financial data Salary of V. P. of production division Salary of supervisor Department M Salary of supervisor Department N Direct materials cost Department M Direct materials cost Department N Direct labor cost Department M Direct labor cost Department N Direct utilities cost Department M Direct utilities cost Department N General factorywide utilities Production supplies Fringe benefits Depreciation $ 200,000 80,000 60,000 300,000 420,000 240,000 680,000 120,000 24,000 36,000 36,000 138,000 720,000 Nonfinancial data Machine hours Department M Machine hours Department N 5,000 1,000 Part c. Assumptions: Units of Product M made Units of Product N made 2,000 4,000