Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:
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 | 1,040 | 470 | 1,510 | ||||||
| Machine-hours | 3,700 | 2,800 | 6,500 | ||||||
| Direct labor-hours | 2,400 | 2,800 | 5,200 | ||||||
| Direct materials costs | $ | 14,000 | $ | 4,150 | $ | 18,150 | |||
| Direct labor costs | 64,000 | 51,000 | 115,000 | ||||||
| 204,665 | |||||||||
| Total costs | $ | 337,815 | |||||||
Tiger Furnishings’s CFO believes that a two-stage cost allocation system would give managers better cost information. She asks the company’s cost accountant to analyze the accounts and assign overhead costs to two pools: overhead related to direct labor cost and overhead related to machine-hours.
The analysis of overhead accounts by the cost accountant follows:
| Manufacturing Overhead | Overhead Estimate |
Cost Pool Assignment | |
| Utilities | $ | 1,700 | Machine-hour related |
| Supplies | 4,800 | Direct labor cost related | |
| Training | 9,600 | Direct labor cost related | |
| Supervision | 24,800 | Direct labor cost related | |
| Machine |
28,000 | Machine-hour related | |
| Plant depreciation | 28,800 | Machine-hour related | |
| Miscellaneous | 106,965 | Direct labor cost related | |
Required:
b. Compute the product costs per unit assuming that Tiger Furnishings uses direct labor costs and machine-hours to allocate overhead to the products. (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
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