Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data...

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Accounting

Tiger Furnishingsproduces two models of cabinets for home theater components, theBasic and the Dominator. Data on operations and costs for Marchfollow:

BasicDominatorTotal
Units produced1,3003801,680
Machine-hours3,3002,7006,000
Directlabor-hours3,4003,7007,100
Direct materialscosts$19,000$4,150$23,150
Direct laborcosts62,50052,500115,000
Manufacturingoverhead costs201,200
Total costs$339,350


Tiger Furnishings’s CFO believes that a two-stage cost allocationsystem would give managers better cost information. She asks thecompany’s cost accountant to analyze the accounts and assignoverhead costs to two pools: overhead related to direct labor costand overhead related to machine-hours.

The analysis ofoverhead accounts by the cost accountant follows:

ManufacturingOverheadOverhead
Estimate
Cost PoolAssignment
Utilities$1,600Machine-hour related
Supplies4,600Direct laborcost related
Training9,200Direct laborcost related
Supervision21,800Direct laborcost related
Machinedepreciation30,000Machine-hourrelated
Plantdepreciation22,400Machine-hourrelated
Miscellaneous111,600Direct laborcost related


Required:

b.Compute the product costs per unit assuming that Tiger Furnishingsuses direct labor costs and machine-hours to allocate overhead tothe products. (Do not round intermediatecalculations.)

   BASICDOMINATOR    TOTAL

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

ALL THE ONESWITH QUESTIONS MARKS REQUIRED ANSWERS THANK YOU

  

Answer & Explanation Solved by verified expert
3.6 Ratings (586 Votes)

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

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