Tiger Furnishings produces two models of cabinets for home theater components, t
ID: 2416457 • Letter: T
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:
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.
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 the direct-labor cost rate in your intermediate calculations. Round your answers to two decimal places.)
Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:
Explanation / Answer
Manufacturing Overhead Cost Pool Assignment Amount $ Basic Domintor Total Basic B/D*A Denominator C/D*A A B C D Utilities Machine-hour related 1500 3200 3300 6500 738.46 761.54 Supplies Direct labor cost related 5000 64000 41000 105000 3047.62 1952.38 Training Direct labor cost related 10000 64000 41000 105000 6095.24 3904.76 Supervision Direct labor cost related 21800 64000 41000 105000 13287.62 8512.38 Machine depreciation Machine-hour related 28000 3200 3300 6500 13784.62 14215.38 Plant depreciation Machine-hour related 29000 3200 3300 6500 14276.92 14723.08 Miscellaneous Direct labor cost related 96655 64000 41000 105000 58913.52 37741.48 Total 110144.00 81811.00 191955.00 Direct materials costs 19,000 4,950 $ 23,950 Direct labor costs 64,000 41,000 105,000 Manufacturing overhead costs 110144 81811 191,955 Total costs 193,144 127,761 $ 320,905 No. Of Units 1,400 310 Cost per unit of product $137.96 412.13