2.38 polnts Tiger Furnishings pooduces two models of cabinets for home theater c
ID: 2579502 • Letter: 2
Question
2.38 polnts Tiger Furnishings pooduces two models of cabinets for home theater components, the Bansic and the Dominator Data on operations and coss Drect materials costs Manufactaring overtead costs 114000 $4550 $ 500 1350 300 Tiger Furmshings' accounts and assign over s CFO beleves that a two stage cost head costs to two pools. overhead related to drect labor allocation system would give managers be cest informalion She asks t cost and overhead nelased to machine-tours The analysn of overhead accounts by the cost accoustant follows o ea @o pe here to sesichExplanation / Answer
Tiger Furnishings
Computation of product costs per unit assuming that the company uses direct labor hours and machine hours to allocate overheads to the products:
Basic
Dominator
Total
Product Costing
Direct material
$14,000
$4,550
$18,550
Direct labor
$64,000
$56,000
$120,000
overhead:
machine related
$39,000
$21,000
$60,000
labor-related
$68,554.83
$83,245.17
$151,800
Total overhead
$107,554.83
$104,245.17
$211,800
Total cost
$185,554.83
$164,795.17
$350,350
units produced
1,260
$260.00
Unit Cost
$147.27
$633.83
Workings:
Machine related overhead:
Total overhead
Basic
Dominator
machine hours
6,000
3,900
2,100
proportion
1000%
75%
25%
Utilities
$1,500
$975
$525
machine depreciation
$24,000
$15,600
$8,400
plant depreciation
$34,500
$22,425
$12,075
Total
$60,000
$39,000
$21,000
Labor-related overhead:
Total overhead
Basic
Dominator
direct labor hours
6,200
2,800
3,400
proportion
100%
45.16%
54.84%
supplies
$4,900
$2,212.90
$2,687.10
Training
$9,800
$4,425.80
$5,374.20
Supervision
$25,800
$11,651.61
$14,148.39
Miscellaneous
$111,300
$50,264.52
$61,035.48
Total
$151,800
68,554.83
$83,245.17
Basic
Dominator
Total
Product Costing
Direct material
$14,000
$4,550
$18,550
Direct labor
$64,000
$56,000
$120,000
overhead:
machine related
$39,000
$21,000
$60,000
labor-related
$68,554.83
$83,245.17
$151,800
Total overhead
$107,554.83
$104,245.17
$211,800
Total cost
$185,554.83
$164,795.17
$350,350
units produced
1,260
$260.00
Unit Cost
$147.27
$633.83
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