Question
Problem 6-61 (Algo) Account Analysis, Two-Stage Allocation, and Product Costing (LO 6-2, 4, 5) Tiger Furnishings produces two models of cabinets for home theater
Problem 6-61 (Algo) Account Analysis, Two-Stage Allocation, and Product Costing (LO 6-2, 4, 5) Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Units produced Machine-hours Basic 1,120 Dominator Total 360 1,4801 3,400 3,100 6,500 Direct labor-hours 3,200 2,900 6,100 Direct naterials costs $17,000 Direct labor costs 64,500 $ 5,550 50,500 $ 22,550 115,000 Manufacturing overhead costs Total costs 205,585 $343,135 Tiger Furnishings's CFO believes that a two-stage cost allocation system would give managers better cost information. She asks the company's cost accountant to analyze the accounts and assign overhead costs to two pools: overhead related to direct labor cost and overhead related to machine-hours. The analysis of overhead accounts by the cost accountant follows: Cost Pool Assignment Machine-hour related Direct labor cost related i Manufacturing Overhead Overhead Estinate Utilities $ 1,600 4,300 8,600 23,800 Direct labor cost related 25,000 31,900 Machine-hour related. Machine-hour related Supplies Training Supervision. Machine depreciation Plant depreciation Direct labor cost related
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