Real Cool produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows. Department Assembly Finishing Budgeted Cost Allocation Base $ 308,000 Machine hours 24,000 Direct labor hours Additional production information for two models of its air conditioners follows. Model A $ 570 Per unit Selling price Direct materials Direct labor 185 235 Model T $ 540 Units produced Assembly machine hours per unit Finishing direct labor hours per unit 175 245 Model A 500 2 MH 3 DLH Budgeted Usage 7,700 machine hours 4,800 direct labor hours Model T 600 3 MH 4 DLH 1a. Compute departmental overhead rates and determine overhead cost per unit for each model. 1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. 2. Compute the total product cost per unit for each model. 3. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 10E: Standard unit cost and journal entries The normal capacity of Algonquin Adhesives Inc. is 40,000...
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Real Cool produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows.
Department
Assembly
Finishing
Budgeted Cost
$ 308,000
Allocation Base
Machine hours
Direct labor hours
24,000
Additional production information for two models of its air conditioners follows.
Model T
$ 540
Per unit
Selling price
Direct materials
Direct labor
175
245
Units produced
Assembly machine hours per unit
Finishing direct labor hours per unit
Model A
$ 570
185
235
Req 1A
Department
Req 18
1a. Compute departmental overhead rates and determine overhead cost per unit for each model.
1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs.
2. Compute the total product cost per unit for each model.
3. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).
Complete this question by entering your answers in the tabs below.
Departmental
Overhead Rate
Model A
500
Req 2
Req 3
Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs.
Note: Round "Hours per unit" to one decimal place.
2 MH
3 DLH
Model A
Hours per Unit
Budgeted Usage
7,700 machine hours
4,800 direct labor hours
Model T
600
3 MH
4 DLH
Overhead
Allocated
Model T
Hours per Unit
Overhead
Allocated
Transcribed Image Text:Real Cool produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows. Department Assembly Finishing Budgeted Cost $ 308,000 Allocation Base Machine hours Direct labor hours 24,000 Additional production information for two models of its air conditioners follows. Model T $ 540 Per unit Selling price Direct materials Direct labor 175 245 Units produced Assembly machine hours per unit Finishing direct labor hours per unit Model A $ 570 185 235 Req 1A Department Req 18 1a. Compute departmental overhead rates and determine overhead cost per unit for each model. 1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. 2. Compute the total product cost per unit for each model. 3. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). Complete this question by entering your answers in the tabs below. Departmental Overhead Rate Model A 500 Req 2 Req 3 Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. Note: Round "Hours per unit" to one decimal place. 2 MH 3 DLH Model A Hours per Unit Budgeted Usage 7,700 machine hours 4,800 direct labor hours Model T 600 3 MH 4 DLH Overhead Allocated Model T Hours per Unit Overhead Allocated
neai Cuor produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows.
Department
Assembly
Finishing
Budgeted Cost
$308,000
24,000
Allocation Base
Machine hours
Direct labor hours
Additional production information for two models of its air conditioners follows.
Per unit
Selling price
Direct materials:
Direct labor
Units produced
Assembly machine hours per unit
Finishing direct labor hours per unit
Reg 1A
Department
Model A
$ 570
185
235
Reg 1B
Req 1A
1a. Compute departmental overhead rates and determine overhead cost per unit for each model.
1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs.
2. Compute the total product cost per unit for each model.
3. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).
Complete this question by entering your answers in the tabs below.
Department
Departmental
Overhead Rate
Assembly
Finishing
Totals
Req 2
Req 18
Model T
$ 540
Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs.
Note: Round "Hours per unit" to one decimal place.
$
175
245
Departmental
Overhead Rate
Model A
Hours per Unit
Model A
500
Req 3
40
Req 2
5
1a. Compute departmental overhead rates and determine overhead cost per unit for each model.
1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs.
2. Compute the total product cost per unit for each model.
3. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).
Complete this question by entering your answers in the tabs below.
2 MH
3 DLH
Overhead
Allocated
Budgeted Usage
7,700 machine hours
4,800 direct labor hours
Req 3
Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs.
Note: Round "Hours per unit" to one decimal place.
Model A
Hours per Unit
80 $
15
Model T
600
3 MH
4 DLH
$
< Req 1A
Overhead
Allocated
Hours per Unit
Model T
2
3
5
Overhead
Allocated
Model T
Hours per Unit
Overhead
Allocated
120.0 $
20.0
Reg 2 >
$
3
7
Transcribed Image Text:neai Cuor produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows. Department Assembly Finishing Budgeted Cost $308,000 24,000 Allocation Base Machine hours Direct labor hours Additional production information for two models of its air conditioners follows. Per unit Selling price Direct materials: Direct labor Units produced Assembly machine hours per unit Finishing direct labor hours per unit Reg 1A Department Model A $ 570 185 235 Reg 1B Req 1A 1a. Compute departmental overhead rates and determine overhead cost per unit for each model. 1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. 2. Compute the total product cost per unit for each model. 3. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). Complete this question by entering your answers in the tabs below. Department Departmental Overhead Rate Assembly Finishing Totals Req 2 Req 18 Model T $ 540 Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. Note: Round "Hours per unit" to one decimal place. $ 175 245 Departmental Overhead Rate Model A Hours per Unit Model A 500 Req 3 40 Req 2 5 1a. Compute departmental overhead rates and determine overhead cost per unit for each model. 1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. 2. Compute the total product cost per unit for each model. 3. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). Complete this question by entering your answers in the tabs below. 2 MH 3 DLH Overhead Allocated Budgeted Usage 7,700 machine hours 4,800 direct labor hours Req 3 Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. Note: Round "Hours per unit" to one decimal place. Model A Hours per Unit 80 $ 15 Model T 600 3 MH 4 DLH $ < Req 1A Overhead Allocated Hours per Unit Model T 2 3 5 Overhead Allocated Model T Hours per Unit Overhead Allocated 120.0 $ 20.0 Reg 2 > $ 3 7
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