Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company's two versions of a special reel used for river fishing. The

image text in transcribed
Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company's two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters. Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $315,200. During that time, the company produced 13,700 units of the M-008 and 2,400 units of the M-123. The direct costs of production were as follows Total Drect materials Direct labor $ 109.600 96000 $ 205.600 109,600 48000 157,600 Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows: Level Cost Driver Costs M-008 M-123 Total Number of production runs Number of inspections Total overhead 139,700 8000 2,000 10ODD 40 60 80,000 95.500 10 20 30 40 5 315.200 Required a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? Round your intermediate calculations and final answers to 2 decimal places.) Total overhead Total unit cost b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? (Round Total unit cost" to 2 decimal places.) Total overhead Total unt cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forest Management Auditing

Authors: Lucio Brotto

1st Edition

0367605872, 978-0367605872

More Books

Students also viewed these Accounting questions