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Problem 6-49 Two-Stage Allocation and Product Costing (LO 6-5) Donovan & Parents produces soccer shorts and jerseys for youth leagues. Most of the production is
Problem 6-49 Two-Stage Allocation and Product Costing (LO 6-5) 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 Shorts Total 48,000 10,800 1,920 $160,000 52,000 $266,400 Jerseys 32,000 6,000 1,200 $96,000 $32,800 Units produced Machine-hours used 16,000 4,800 720 $64,000 $19,200 Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead costs 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: Related to: Machine-hours Account Amount 48,000 33,600 105,600 38,400 40,800 Utilities Supplies Machine depreciation and maintenance Purchasing and storing materials Miscellaneous Materials Machine-hours Materials 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. (Enter "Materials related overhead" as a whole percentage (i.e., 32).) Overhead Rate Machine-hour related Materials related per hour % b. Compute the total costs of production and the cost per unit for each of the two products for March. (Round "Cost per unit" to 2 decimal places.) Shorts Jerseys Total cost Cost per unit
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