Wall Nuts, Inc. produces paneling that requires two processes, A and B, to compl
ID: 2623915 • Letter: W
Question
Wall Nuts, Inc. produces paneling that requires two processes, A and B, to complete. Oak is the best-selling of all the many types of paneling produced. Information related to the 40,000 units of oak paneling produced annually is shown in the following table:
Direct materials
$380,000
Direct labor
Department A (6,000 DLH x $25 per DLH)
$150,000
Department B (35,125 DLH x $16 per DLH)
$562,000
Machine Hours
Department A
24,000 MH
Department B
32,000 MH
Wall Nuts
Direct materials
$380,000
Direct labor
Department A (6,000 DLH x $25 per DLH)
$150,000
Department B (35,125 DLH x $16 per DLH)
$562,000
Machine Hours
Department A
24,000 MH
Department B
32,000 MH
Explanation / Answer
$380,000 + $150,000 + $562,000 = $1,092,000/40,000 = $27.30
Total manufacturing cost (per unit) = $27.30 + $8.70 (total overhead applied) = $36.00 per unit
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