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Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material used: canvas, nylon, or leather. The company uses a plantwide rate based on direct labor-hours. The plantwide rate is $5.00 per labor-hour. All direct labor at TTP is paid $37 per hour. Canvas and nylon backpacks are produced in Department 1. Leather backpacks are produced in Department 2. The product costs (per backpack) follow. Required: a. Compute the total unit cost of each backpack model using the plantwide allocation method. b. The machines in Department: 1 are older and almost fully depreciated. The equipment in Department 2 was recently updated and the process in Department 2 is more highly automated. At the request of the manager of Department 1, a cost analyst at TTP provided the following information on overhead costs, machine-hours and direct labor-hours for the two departments. Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for Department 2, compute the allocation rate for each. c. Compute the unit cost of each model of backpack using the department allocation rates computed in requirement ( b ) (labor-hours in Department 1 and machine-hours in Department 2). Note: Do not round your intermediate calculations. Complete this question by entering your answers in the tabs below. Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the Introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE believes that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor cost5. For the most recent year, which is representative, manufacturing overhead totaled $2,172,000 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows: 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? b. How much 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? Complete this question by entering your answers in the tabs below. Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material used: canvas, nylon, or leather. The company uses a plantwide rate based on direct labor-hours. The plantwide rate is $5.00 per labor-hour. All direct labor at TTP is paid $37 per hour. Canvas and nylon backpacks are produced in Department 1. Leather backpacks are produced in Department 2. The product costs (per backpack) follow. Required: a. Compute the total unit cost of each backpack model using the plantwide allocation method. b. The machines in Department: 1 are older and almost fully depreciated. The equipment in Department 2 was recently updated and the process in Department 2 is more highly automated. At the request of the manager of Department 1, a cost analyst at TTP provided the following information on overhead costs, machine-hours and direct labor-hours for the two departments. Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for Department 2, compute the allocation rate for each. c. Compute the unit cost of each model of backpack using the department allocation rates computed in requirement ( b ) (labor-hours in Department 1 and machine-hours in Department 2). Note: Do not round your intermediate calculations. Complete this question by entering your answers in the tabs below. Asbury Coffee Enterprises (ACE) manufactures two models of coffee grinders: Personal and Commercial. The Personal grinders have a smaller capacity and are less durable than the Commercial grinders. ACE only recently began producing the Commercial model. Since the Introduction of the new product, profits have been steadily declining, although sales have been increasing. The management at ACE believes that the problem might be in how the accounting system allocates costs to products. The current system at ACE allocates manufacturing overhead to products based on direct labor cost5. For the most recent year, which is representative, manufacturing overhead totaled $2,172,000 based on production of 30,000 Personal grinders and 10,000 Commercial grinders. Direct costs were as follows: Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows: 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? b. How much 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? Complete this question by entering your answers in the tabs below
