Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data
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 | Dominator | Total | |||||||
Units produced | 1,020 | 350 | 1,370 | ||||||
Machine-hours | 3,100 | 3,900 | 7,000 | ||||||
Direct labor-hours | 2,300 | 3,600 | 5,900 | ||||||
Direct materials costs | $ | 15,000 | $ | 4,550 | $ | 19,550 | |||
Direct labor costs | 64,000 | 36,000 | 100,000 | ||||||
Manufacturing overhead costs | 190,700 | ||||||||
Total costs | $ | 310,250 | |||||||
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:
Manufacturing Overhead | OverheadEstimate | Cost Pool Assignment | |
Utilities | $ | 1,600 | Machine-hour related |
Supplies | 5,000 | Direct labor cost related | |
Training | 10,000 | Direct labor cost related | |
Supervision | 23,800 | Direct labor cost related | |
Machine depreciation | 29,000 | Machine-hour related | |
Plant depreciation | 32,400 | Machine-hour related | |
Miscellaneous | 88,900 | 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. Round your final answers to the nearest whole number.)
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher