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Donovan & Parents produces soccer shorts and jerseys for youth leagues. Most of the production is done by machine. Data on operations and costs
Donovan & Parents produces soccer shorts and jerseys for youth leagues. Most of the production is done by machine. Data on operations and costs for March follow: Units produced Machine-hours used Jerseys 9,800 990 Shorts Direct labor-hours Direct materials costs 230 $11,800 5,500 760 100 Total 15,300 1,750 330 $8,400 Direct labor costs $ 4,600 $2,000 $20,200 $ 6,600 Manufacturing overhead costs $22,079 Management asks the firm's cost accountant to compute product costs. The accountant first assigns overhead costs to two pools: overhead related to direct materials and overhead related to machine-hours. The analysis of overhead accounts by the cost accountant follows: Account Amount Utilities $3,980 Related to: Machine-hours Supplies 2,790 Materials Machine depreciation and maintenance Purchasing and storing materials 9,265 Machine-hours 2,664 Materials Miscellaneous 3,380 Machine-hours Required: a. Compute the predetermined overhead rates assuming that Donovan uses machine-hours to allocate machine-related overhead costs and materials costs to allocate materials-related overhead costs. (Round "Machine-related overhead" rate to 2 decimal places and "Materials related overhead" rate as a whole percentage (i.e., 32).) Machine-hour related $ Materials related Overhead Rate 9.50 per hour 27%
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