Donovan & Parents produces soccer shorts and jerseys for youth leagues. Most of the production is done by machine. Data on operations and costs for March follow.

JerseysShortsTotalUnits produced10,9005,40016,300Machine-hours used1,0007601,760Direct labor-hours210100310Direct materials costs$12,800$7,700$20,500Direct labor costs$4,200$2,000$6,200Manufacturing overhead costs$21,433

Management asks the firm's cost accountant to compute product costs. The accountant first assigns overhead costs to two pools: overhead related to direct materials and overhead related to machine-hours. The analysis of overhead accounts by the cost accountant follows.

AccountAmountRelated to:Utilities$3,910Machine-hoursSupplies2,710MaterialsMachine depreciation and maintenance8,108Machine-hoursPurchasing and storing materials3,235MaterialsMiscellaneous3,470Machine-hours

Required:

a.Compute the predetermined overhead rates assuming that Donovan usesmachine-hours to allocate machine-relatedoverhead costs andmaterials costs to allocate materials-relatedoverhead costs.

b.Compute the total costs of production and the cost per unit for each of the two products for March.

Answer rating: 100% (QA)

Answer a To compute the predetermined overhead rates well follow the steps outlined in the previous response 1 Total overhead costs related to machine... View the full answer