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4 September, 13:20

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 1,500 250 1,750

Machine-hours 4,000 2,000 6,000

Direct labor-hours 4,000 2,000 6,000

Direct materials costs $ 11,000 $ 3,500 $ 14,500

Direct labor costs 72,000 34,000 106,000

Manufacturing overhead costs 188,786

Total costs $ 309,286

Required:

Compute the individual product costs per unit assuming that Tiger Furnishings uses direct labor costs to allocate overhead to the products. (Do not round intermediate calculations. Round final answers to 2 decimal places.

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Answers (1)
  1. 4 September, 17:18
    0
    Basic = $140.82

    Dominator = $392.216

    Explanation:

    For Basic:

    Total cost for Basic:

    = Direct materials costs + Direct labor costs + Manufacturing overhead

    = $ 11,000 + $72,000 + $128,232

    = $211,232

    Per unit cost:

    = Total cost for Basic : Number of units produced

    = $211,232 : 1,500

    = $140.82

    For Dominator:

    Total cost for Dominator:

    = Direct materials costs + Direct labor costs + Manufacturing overhead

    = $3,500 + $34,000 + $60,554

    = $98,054

    Per unit cost:

    = Total cost for Basic : Number of units produced

    = $98,054 : 250

    = $392.216

    Workings:

    Manufacturing overhead (Basic):

    = Manufacturing overhead costs * (Direct labor costs : Total direct labor costs)

    = $188,786 * ($72,000 : $106,000)

    = $128,232

    Manufacturing overhead (Dominator):

    = Manufacturing overhead costs * (Direct labor costs : Total direct labor costs)

    = $188,786 * ($34,000 : $106,000)

    = $60,554
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