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 1,000 450 1,450

Machine-hours 3,000 2,800 5,800

Direct labor-hours 2,900 2,300 5,200

Direct materials costs $ 8,200 $ 3,350 $ 11,550

Direct labor costs 58,700 31,300 90,000

Manufacturing overhead costs 183,560

Total costs $ 285,110

Required:

Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor-hours to allocate overhead costs.

Predetermined overhead rate __________% per direct labor hour

Answer 1

(feel free to ask for any further doubt we will provide you solution) Questions Data
Particulars	Basic	Dominator	Total
Unit Produced	1000	450	1450
Machine Hours	3000	2800	5800
Direct Labours Hours	2900	2300	5200
Direct Material Cost	$       8,200.00	$       3,350.00	$     11,550.00
Direct Labour Cost	$     58,700.00	$     31,300.00	$     90,000.00
Manufacturing Overhead			$ 1,83,560.00
Total Cost			$ 2,85,110.00
Solutions
1. Computation of overhead rate assuming that Tiger Furnishings uses direct labour-hours to allocate overhead costs.
Total Manufacturing overhead	A	$ 1,83,560
Total Direct Labour Hours	B	5200
Overhead rate	A/B	$        35.30
Particulars	Basic	Dominator	Total
Unit Produced	1000	450	1450
Machine Hours	3000	2800	5800
Direct Labours Hours	2900	2300	5200
Direct Material Cost	$       8,200.00	$       3,350.00	$     11,550.00
Direct Labour Cost	$     58,700.00	$     31,300.00	$     90,000.00
Manufacturing Overhead	$ 1,02,370.00	$     81,190.00	$ 1,83,560.00
Total Cost	$ 1,69,270.00	$ 1,15,840.00	$ 2,85,110.00
2. Predetermined overhead rate __________% per direct labour hour
Particulars	Basic	Dominator	Total
Direct Labour Cost	$     58,700.00	$     31,300.00	$     90,000.00
Direct Labours Hours	2900	2300	5200
Direct Labour rate per Hours	$             20.24	$             13.61	$             17.31
Overhead rate per hours	$             35.30	$             35.30	$             35.30
% per direct labour hour	174.40%	259.39%	203.96%