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Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified
Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material used: canvas, nylon, or leather. The company uses a plantwide rate based on direct labor-hours. The plantwide rate is $5.00 per labor-hour. All direct labor at TTP is paid $30 per hour. Canvas and nylon backpacks are produced in Department 1. Leather backpacks are produced in Department 2. The product costs (per backpack) follow. Canvas Direct materials Direct labor $ 25.00 60.00 Nylon $ 30.00 75.00 Required: Leather $ 40.00 81.00 a. Compute the total unit cost of each backpack model using the plantwide allocation method. b. The machines in Department 1 are older and almost fully depreciated. The equipment in Department 2 was recently updated and the process in Department 2 is more highly automated. At the request of the manager of Department 1, a cost analyst at TTP provided the following information on overhead costs, machine-hours and direct labor-hours for the two departments. Overhead Machine-hours Labor-hours Department 1 $ 65,000 16,000 20,000 Department 2 $ 94,600 22,000 11,000 Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for Department 2, compute the allocation rate for each. c. Compute the unit cost of each model of backpack using the department allocation rates computed in requirement (b) (labor- Department 1 and machine-hours in Department 2). Note: Do not round your intermediate calculations. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the total unit cost of each backpack model using the plantwide allocation method. Note: Do not round your intermediate calculations. Round your answers to 2 decimal places. Total Unit Cost Canvas Nylon Leather Required A Required B Required C Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for Department 2, compute the allocation rate for each. Note: Round your answers to 2 decimal places. Allocation Rate per labor hour Department 1 Department 2 per machine hour Required A Required B Required C Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for Department 2, compute the allocation rate for each. Note: Round your answers to 2 decimal places. Allocation Rate per labor hour Department 1 Department 2 per machine hour
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