two models of cabinets for home theater components, the Basic and the Dominator.
ID: 2518601 • Letter: T
Question
two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow Units produced Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead costs 1,670 7.000 5.600 $14,0003850 17,850 1,380 3,500 2.700500 2.900 63.500 5100 100 $342.130 Tiger Furnishings's CFO believes that a two-stage cost allocation system would give managers better cost indormation She costs to two pools: overhead related to direct labor cost and overhead related to machine-hours t asks the company's cost accountant to analyce the accounts and assign overhead The analysis of overhead accounts by the cost accountant follows Machine-hour related Supplies Trainng 4.100 Direct labor cost related 8,200 Direct labor cost relaled 22.800 Direct labor cost related 32.000 Machine-hour related 29,500 Machine-hour related 111,180 Drect labor Pliant depreciation cost relañedExplanation / Answer
Calculation of Unit Cost :-
Working Note :-
Overhead Rate = Total Overhead cost / Total Direct Labor costs
= $209280 / $115000
= $1.82 per dollar of direct wages
Basic Manufacturing Overhead = $1.82 * $63500 = $115559
Dominator Manufacturing Overhead = $1.82 * $51500 = $93721
Particulars Basic Dominator Direct Materials $14000 $3850 Direct Labour $63500 $51500 Manufacturing Overhead (Working Note) $115559 $93721 Total Costs $193059 $149071 No. of Units 1380 290 Unit Cost $139.898 $514.038Related Questions
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