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CHECK FIGURE c. Product N: $522.55 Problem 4-17A Cost accumulation and allocation Yalland Manufacturing Company makes two different products, M and N. The company's two
CHECK FIGURE c. Product N: $522.55 Problem 4-17A Cost accumulation and allocation Yalland Manufacturing Company makes two different products, M and N. The company's two departments are named after the products; for example, Product M is made in Department M. Yalland's accountant has identified the following annual costs associated with these two products. Financial data Salary of vice president of production division $160,000 Salary of supervisor Department M 80,000 Salary of supervisor Department N 60,000 Direct materials cost Department M 300,000 Direct materials cost Department N 420,000 Direct labor cost Department M 240,000 Direct labor cost Department N 680,000 Direct utilities cost Department M 120,000 Direct utilities cost Department N 24,000 General factorywide utilities 36,000 Production supplies 36,000 Fringe benefits 138,000 Depreciation 600,000 Nonfinancial data Machine hours Department M 5,000 Machine hours Department N 1,000 Required a. Identify the costs that are (1) direct costs of Department M, (2) direct costs of Department N, and (3) indirect costs. b. Select the appropriate cost drivers for the indirect costs and allocate these costs to Departments M and N. Page 186 c. Determine the total estimated cost of the products made in Departments M and N. Assume that Yalland produced 2,000 units of Product M and 4,000 units of Product N during the year. If Yalland prices its products at cost plus 40 percent of cost, what price per unit must it charge for Product M and for Product N
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