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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 for
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 Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead costs Jerseys 9,500 1,000 240 $12,100 $ 4,800 Shorts 4,600 850 100 $7,200 $2,000 Total 14,100 1,850 340 $19,300 $ 6,800 $24,885 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 Utilities Supplies Machine depreciation and maintenance Purchasing and storing materials Miscellaneous Amount $ 3,960 2,750 10,810 Related to: Machine-hours Materials Machine-hours Materials Machine-hours 4,005 3,360 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. b. Compute the total costs of production and the cost per unit for each of the two products for March
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