Tent Master produces two lines of tents sold to outdoor enthusiasts. The tents a
ID: 2589633 • Letter: T
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.
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.)
Using the plantwide overhead rate, determine the total cost per unit for the two products if the direct materials and direct labor cost is $21 per pup tent and $21 per pop-up tent. (Round your intermediate calculations and answers to 2 decimal places.)
Complete the below table. (Round your intermediate calculations and answers to 2 decimal places.)
Using ABC, compute the total cost per unit for each tent if the direct labor and direct materials cost is $21 per pup tent and $21 per pop-up tent. (Round your intermediate calculations and final answers to 2 decimal places.)
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.
Explanation / Answer
1. Total overheads = overheads of department A + overehads of department B + overhead of support department = 1741525.
Total labor hours = 3700 + 2220 = 5920.
Plant wide overhead rate = 1741525 divided by 5920 = 294.18.
Total overheads of Pup tent = 3700 multiplied by 294.18 = 1088466
Overhead cost per unit = 1088466 divided by 20900 units =52.08 per unit.
Total overheads of Pop-up tent = 2220 multiplied by 294.18 = 653080
Overhead cost per unit = 653080 divided by 10450 units = 62.5 per unit.
2.Total cost per unit for the two products:
3.Determination of gross profit/loss per unit:
4. Calculation of overhead rate under ABC:
Calculation of total overhead cost for the tents
Overhead cost per unit:
Pup tent = 760620 divided by 20900 units =36.39 per unit.
Pop-up tent = 980905 divided by 10450 units = 93.87 per unit.
Total manufacturing cost:
Pup Tent Pop-up tent Direct material and labor cost $21 $21 Manufacturing overhead 52.08 62.5 Total cost per unit 73.08 83.5Related Questions
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