Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high-quality hand-finishing. Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine-hours in Forming and direct labour cost in Finishing. Information related to costs for last year is provided below: Annual production and sales (units) Direct materials cost per unit Direct labour cost per unit: Forming Department Finishing Department Machine-hours per unit: Forming Department Finishing Department Tennis Golf Racquets Clubs 6,000 9,500 $ 5.50 $ 3.50 $6.00 $ 5.50 $ 8.00 $ 9.00 0.25 0.00 0.25 0.50 In addition, the firm budgets manufacturing overhead at $50,750 in the Forming Department and $56,500 in the Finishing Department. Required: 1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.) Forming Finishing per MH per DLS 2. Determine the total cost per unit of tennis racquets and golf clubs. (Round your intermediate calculations and final answers to 2 decimal places.) Prev 1 of 4 Next >
Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high-quality hand-finishing. Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine-hours in Forming and direct labour cost in Finishing. Information related to costs for last year is provided below: Annual production and sales (units) Direct materials cost per unit Direct labour cost per unit: Forming Department Finishing Department Machine-hours per unit: Forming Department Finishing Department Tennis Golf Racquets Clubs 6,000 9,500 $ 5.50 $ 3.50 $6.00 $ 5.50 $ 8.00 $ 9.00 0.25 0.00 0.25 0.50 In addition, the firm budgets manufacturing overhead at $50,750 in the Forming Department and $56,500 in the Finishing Department. Required: 1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.) Forming Finishing per MH per DLS 2. Determine the total cost per unit of tennis racquets and golf clubs. (Round your intermediate calculations and final answers to 2 decimal places.) Prev 1 of 4 Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high-quality hand-finishing.
Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to
allocate overhead costs. Overhead is allocated based on machine-hours in Forming and direct labour cost in Finishing. Information
related to costs for last year is provided below:
Annual production and sales (units)
Direct materials cost per unit
Direct labour cost per unit:
Forming Department
Finishing Department
Machine-hours per unit:
Forming Department
Finishing Department
Tennis Golf
Racquets Clubs
6,000 9,500
$ 5.50 $ 3.50
$6.00 $ 5.50
$ 8.00 $ 9.00
0.25
0.00
0.25
0.50
In addition, the firm budgets manufacturing overhead at $50,750 in the Forming Department and $56,500 in the Finishing Department.
Required:
1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.)
Forming
Finishing
per MH
per DLS
2. Determine the total cost per unit of tennis racquets and golf clubs. (Round your intermediate calculations and final answers to 2
decimal places.)
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