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Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:
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 Dominator Total 1,500 3,900 270 3,100 1,770 7,000 Direct labor-hours 2,800 2,800 5,600 Direct materials costs $14,000 Direct labor costs 64,000 $ 5,650 46,000 $ 19,650 110,000 Manufacturing overhead costs Total costs 195,810 $325,460 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: 4,400 8,800 Manufacturing Overhead Overhead Estimate Utilities $ 1,600 Supplies Training Supervision 20,800 Machine depreciation 25,000 Plant depreciation 29,400 Miscellaneous 105,810 Cost Pool Assignment Machine-hour related Direct labor cost related Direct labor cost related Direct labor cost related Machine-hour related Machine-hour related Direct labor cost related
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