Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high quality
Question:
Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high quality hand-finishing. Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine-hours in Forming and direct labour cost in Finishing. Information related to costs for last year is provided below:
In addition, the firm budgets manufacturing overhead at $35,750 in the Forming Department and $46,500 in the Finishing Department.
Required:
1 . Determine the overhead application rate for each department.
2. Determine the total cost per unit of tennis racquets and golf clubs.
Step by Step Answer:
Managerial Accounting
ISBN: 9781259275814
11th Canadian Edition
Authors: Ray H Garrison, Alan Webb, Theresa Libby