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		1,300			380			1,680
Machine-hours		3,300			2,700			6,000
Direct labor-hours		3,400			3,700			7,100
Direct materials costs	$	19,000		$	4,150		$	23,150
Direct labor costs		62,500			52,500			115,000
Manufacturing overhead costs								201,200
Total costs							$	339,350

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	$	1,600	Machine-hour related
Supplies		4,600	Direct labor cost related
Training		9,200	Direct labor cost related
Supervision		21,800	Direct labor cost related
Machine depreciation		30,000	Machine-hour related
Plant depreciation		22,400	Machine-hour related
Miscellaneous		111,600	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.)

   BASIC DOMINATOR    TOTAL

PRODUCT COSTING
DIRECT MATERIAL    ?    ? ?
DIRECT LABOR    ?    ? ?
OVERHEAD
MACHINE-RELATED    ? ? ?
LABOR-RELATED    ?    ? ?
TOTAL-OVERHEAD    ?    ? ?
TOTAL COST ?    ? ?
UNITS PRODUCED    ? ?
UNIT COST    ?    ?

ALL THE ONES WITH QUESTIONS MARKS REQUIRED ANSWERS THANK YOU

  

Answer 1

b) Predetermined rate = 201,200/ 115,000 = 175%

Based on Direct Labor Costs
	Basic	Dominator	Total
Direct Materials	$    19,000.00	$      4,150.00	$    23,150.00
Direct Labor	$    62,500.00	$    52,500.00	$ 115,000.00
Manufacturing Overhead	$ 109,347.83	$    91,852.17	$ 201,200.00
Total Costs	$ 190,847.83	$ 148,502.17	$ 339,350.00
Units Produced	1,300.00	380.00
Unit Cost	$          146.81	$          390.80

Predetermined rate = 201,200/6,000 = 33.53 Per Machine Hour

Based on Machine Hours
	Basic	Dominator	Total
Direct Materials	$    19,000.00	$      4,150.00	$    23,150.00
Direct Labor	$    62,500.00	$    52,500.00	$ 115,000.00
Manufacturing Overhead	$ 110,660.00	$    90,540.00	$ 201,200.00
Total Costs	$ 192,160.00	$ 147,190.00	$ 339,350.00
Units Produced	1,300.00	380.00
Unit Cost	$          147.82	$          387.34