Question
Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Basic
Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:
Basic | Dominator | Total | |||||||
Units produced | 1,040 | 340 | 1,380 | ||||||
Machine-hours | 3,300 | 2,700 | 6,000 | ||||||
Direct labor-hours | 3,500 | 2,800 | 6,300 | ||||||
Direct materials costs | $ | 15,000 | $ | 5,550 | $ | 20,550 | |||
Direct labor costs | 64,500 | 35,500 | 100,000 | ||||||
Manufacturing overhead costs | 181,000 | ||||||||
Total costs | $ | 301,550 | |||||||
Tiger Furnishingss CFO believes that a two-stage cost allocation system would give managers better cost information. She asks the companys 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:
Manufacturing Overhead | Overhead Estimate | Cost Pool Assignment | |
Utilities | $ | 1,500 | Machine-hour related |
Supplies | 4,600 | Direct labor cost related | |
Training | 9,200 | Direct labor cost related | |
Supervision | 23,800 | Direct labor cost related | |
Machine depreciation | 28,000 | Machine-hour related | |
Plant depreciation | 24,500 | Machine-hour related | |
Miscellaneous | 89,400 | Direct labor cost related | |
Required:
b. Compute the product costs per unit assuming that Tiger Furnishings uses direct labor costs and machine-hours to allocate overhead to the products. (Do not round intermediate calculations.)
Basic | Dominator | Total | |
Product costing | |||
Direct Material | |||
Direct Labor | |||
Overhead | |||
Machine-related | |||
Labor related | |||
Total Overhead | |||
Total cost | |||
Units produced | |||
Unit cost |
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