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Problem 7-139 Cosgrove Company manufactures two products Cosgrove Company manufactures two products, Product K-7 and Product L-15. Product L-15 is of fairly recent origin, having
Problem 7-139 Cosgrove Company manufactures two products Cosgrove Company manufactures two products, Product K-7 and Product L-15. Product L-15 is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product K-7 Product L-15 is the more complex of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct labor time for Product K-7. Product L-15 is produced on an automated production line Overhead currently is applied to the products on the basis of direct labor-hours. The company estimated it would incur $1,139,421 in manufacturing overhead costs and produce 15,000 units of Product L-15 and 75,000 units of Product K-7 during the current year. Unit costs for materials and labor are: ProductProduct L- K-7 15 Direct material 17 24 11 13 Direct labor Required: a-1 Compute the predetermined overhead rate under the current method of allocation and. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the sign in your response.) Predetermined overhead rate a-2 Determine the unit product cost of each product for the current year. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the sign in your response.) Unit Product Cost Product K-7 Product L-15
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