Problem:
Loin Cabinetry produces two models of home shelving, the Basic-Super and the Mega-Super. Data on operations and costs for November are:
| |
|
|
Basic-Super |
Mega-Super |
Total |
| Machine hours |
8,000.00 |
4,000.00 |
12,000.00 |
| Direct labor hours |
6,000.00 |
4,000.00 |
10,000.00 |
| |
|
|
|
| Units produced |
1,000.00 |
250.00 |
1,250.00 |
| |
|
|
|
| Direct material costs |
20,000.00 |
7,500.00 |
27,500.00 |
| Direct labor costs |
129,000.00 |
71,000.00 |
200,000.00 |
| Manufacturing overhead costs |
|
|
348,200.00 |
| Total costs |
|
|
575,700.00 |
Required: Compute the predetermined overhead rate, assuming Loin Cabinetry uses:
(a) Direct labor hours to allocate overhead costs
(b) Direct labor costs to allocate overhead costs
(c) Machine hours to allocate overhead costs
Refer to (b). Compute the unit cost for each model.