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 | 1,400 | 300 | 1,700 | ||||||
Machine-hours | 3,900 | 2,600 | 6,500 | ||||||
Direct labor-hours | 2,100 | 2,400 | 4,500 | ||||||
Direct materials costs | $ | 15,000 | $ | 4,650 | $ | 19,650 | |||
Direct labor costs | 63,500 | 51,500 | 115,000 | ||||||
Manufacturing overhead costs | 205,010 | ||||||||
Total costs | $ | 339,660 | |||||||
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 | Overhead Estimate | Cost Pool Assignment | |
Utilities | $ | 1,700 | 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 | 24,000 | Machine-hour related | |
Plant depreciation | 32,800 | Machine-hour related | |
Miscellaneous | 108,910 | 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