Question

Tent Master produces two lines of tents sold to outdoor enthusiasts. The tents are cut to specifications in department A. In department B the tents are sewn and folded. The activities, costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.

Process	Activity	Overhead cost				Driver	Quantity
Department A	Pattern alignment		$	117,000		Batches	1,000
	Cutting			60,280		Machine hours	13,700
	Moving product			150,000		Moves	3,000
			$	327,280
Department B	Sewing		$	425,600		Direct labor hours	6,080
	Inspecting			52,500		Inspections	750
	Folding			65,340		Units	29,700
			$	543,440
Support	Design		$	612,000		Modification orders	360
	Providing space			72,800		Square feet	10,400
	Materials handling			334,400		Square yards	880,000
			$	1,019,200

Additional production information on the two lines of tents follows.

	Pup Tent		Pop-Up Tent
Units produced	19,800	units	9,900	units
Moves	1,000	moves	2,000	moves
Batches	250	batches	750	batches
Number of inspections	300	inspections	450	inspections
Machine hours	7,600	MH	6,100	MH
Direct labor hours	3,800	DLH	2,280	DLH
Modification orders	90	modification orders	270	modification orders
Space occupied	5,200	square feet	5,200	square feet
Material required	510,000	square yards	370,000	square yards

1. Using a plantwide overhead rate based on direct labor hours, compute the overhead cost that is assigned to each pup tent and each pop-up tent. (Round your intermediate calculations and final answers to 2 decimal places.)
  

2. Using the plantwide overhead rate, determine the total cost per unit for the two products if the direct materials and direct labor cost is $19 per pup tent and $22 per pop-up tent. (Round your intermediate calculations and answers to 2 decimal places.)
  

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Item8

Item 8 Part 3 of 5 5 points

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Required information

[The following information applies to the questions displayed below.]

Tent Master produces two lines of tents sold to outdoor enthusiasts. The tents are cut to specifications in department A. In department B the tents are sewn and folded. The activities, costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.

Process	Activity	Overhead cost				Driver	Quantity
Department A	Pattern alignment		$	117,000		Batches	1,000
	Cutting			60,280		Machine hours	13,700
	Moving product			150,000		Moves	3,000
			$	327,280
Department B	Sewing		$	425,600		Direct labor hours	6,080
	Inspecting			52,500		Inspections	750
	Folding			65,340		Units	29,700
			$	543,440
Support	Design		$	612,000		Modification orders	360
	Providing space			72,800		Square feet	10,400
	Materials handling			334,400		Square yards	880,000
			$	1,019,200

Additional production information on the two lines of tents follows.

	Pup Tent		Pop-Up Tent
Units produced	19,800	units	9,900	units
Moves	1,000	moves	2,000	moves
Batches	250	batches	750	batches
Number of inspections	300	inspections	450	inspections
Machine hours	7,600	MH	6,100	MH
Direct labor hours	3,800	DLH	2,280	DLH
Modification orders	90	modification orders	270	modification orders
Space occupied	5,200	square feet	5,200	square feet
Material required	510,000	square yards	370,000	square yards

Complete the below table. (Round your intermediate calculations and answers to 2 decimal places.)
  

4. Using ABC, compute the total cost per unit for each tent if the direct labor and direct materials cost is $19 per pup tent and $22 per pop-up tent. (Round your intermediate calculations and final answers to 2 decimal places.)

5. Assume if the market price is $75 per pup tent and $150 per pop-up tent, determine the gross profit / loss per unit for each tent. (Round your intermediate calculations and answers to 2 decimal places.)

Answer 1

1.Plantwide overhead rate per direct labor hour = Total cost/Total direct labor hours

= (327,280+543,440+1,019,200)/6,080

= $310.84 per labor hour

Overhead	Driver	Rate	Total Cost	Units	OH Cost per Unit
Pup Tent	3,800	310.84	1,181,192	19,800	59.66
Pop up Tent	2,280	310.84	708,715	9,900	71.59

2.

	Pup tent	Pop Up tent
Material and Labor Cost per Unit	19	22
Overhead Cost per Unit	59.66	71.59
Total cost per unit	78.66	93.59

4.Calculation of activity rates:

Overhead	Cost	Driver	Rate/Activity
Pattern Alignment	117,000	1,000	117
Cutting	60,280	13,700	4.4
Moving Product	150,000	3,000	5
Sewing	425,600	6,080	70
Inspecting	52,500	750	70
Folding	65,340	29,700	2.2
Design	612,000	360	1,700
Providing Space	72,800	10,400	7
Material Handling	334,400	880,000	0.38

Overhead Assigned:

Pup tent
Overhead	Driver	Rate	Total OH Cost
Pattern Alignment	250	117	29,250
Cutting	7,600	4.4	33,440
Moving Product	1,000	5	5,000
Sewing	3,800	70	266,000
Inspecting	300	70	21,000
Folding	19,800	2.2	43,560
Design	90	1,700	153,000
Providing Space	5,200	7	36,400
Material Handling	510,000	0.38	193,800
		Total	781,450

Pop up tent
Overhead	Driver	Rate	Total OH Cost
Pattern Alignment	750	117	87,750
Cutting	6,100	4.4	26,840
Moving Product	2,000	5	10,000
Sewing	2,280	70	159,600
Inspecting	450	70	31,500
Folding	9,900	2.2	21,780
Design	270	1,700	459,000
Providing Space	5,200	7	36,400
Material Handling	370,000	0.38	140,600
		Total	973,470

	Pup tent	Pop Up tent
Material and Labor Cost per Unit	19	22
Overhead Cost per Unit	39.47	98.33
Total cost per unit	58.47	120.33

	Pup tent	Pop up tent
Market price	75	150
Total Cost	58.47	98.33
Gross Profit (loss)	16.53	51.57