Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material used: canvas, nylon, or leather. The company uses a plantwide rate based on direct labor-hours. The plantwide rate is $5.00 per labor-hour. All direct labor at TTP is paid $36 per hour. Canvas and nylon backpacks are produced in Department 1. Leather backpacks are produced in Department 2. The product costs (per backpack) follow. Direct materials Direct labor Overhead Machine-hours Labor-hours Canvas $ 31.00 93.60 Nylon $ 36.00 111.60 Required: a. Compute the total unit cost of each backpack model using the plantwide allocation method. b. The machines in Department 1 are older and almost fully depreciated. The equipment In Department 2 was recently updated and the process in Department 2 is more highly automated. At the request of the manager of Department 1, a cost analyst at TTP provided the following information on overhead costs, machine-hours and direct labor-hours for the two departments. Leather $ 46.00 118.80 Department 1 Department 21 $ 79,520 $ 104,920 17,200 22,400 24,400 12,200 Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for Department 2, compute the allocation rate for each. Canvas Nylon Leather c. Compute the unit cost of each model of backpack using the department allocation rates computed in requirement (b) (labor-hours in Department 1 and machine-hours in Department 2). Note: Do not round your Intermediate calculations. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the total unit cost of each backpack model using the plantwide allocation method. Note: Do not round your intermediate calculations. Round your answers to 2 decimal places. Total Unit Cost dred A Required B
Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant. The different backpack models are identified by the primary material used: canvas, nylon, or leather. The company uses a plantwide rate based on direct labor-hours. The plantwide rate is $5.00 per labor-hour. All direct labor at TTP is paid $36 per hour. Canvas and nylon backpacks are produced in Department 1. Leather backpacks are produced in Department 2. The product costs (per backpack) follow. Direct materials Direct labor Overhead Machine-hours Labor-hours Canvas $ 31.00 93.60 Nylon $ 36.00 111.60 Required: a. Compute the total unit cost of each backpack model using the plantwide allocation method. b. The machines in Department 1 are older and almost fully depreciated. The equipment In Department 2 was recently updated and the process in Department 2 is more highly automated. At the request of the manager of Department 1, a cost analyst at TTP provided the following information on overhead costs, machine-hours and direct labor-hours for the two departments. Leather $ 46.00 118.80 Department 1 Department 21 $ 79,520 $ 104,920 17,200 22,400 24,400 12,200 Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for Department 2, compute the allocation rate for each. Canvas Nylon Leather c. Compute the unit cost of each model of backpack using the department allocation rates computed in requirement (b) (labor-hours in Department 1 and machine-hours in Department 2). Note: Do not round your Intermediate calculations. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the total unit cost of each backpack model using the plantwide allocation method. Note: Do not round your intermediate calculations. Round your answers to 2 decimal places. Total Unit Cost dred A Required B
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Exercise 9-30 (Algo) Plantwide versus Department Allocation (LO 9-2, 3)
Trombly Travel Products (TTP) manufactures and sells travel bags and accessories. TTP produces backpacks at its West Street plant.
The different backpack models are identified by the primary material used: canvas, nylon, or leather. The company uses a plantwide
rate based on direct labor-hours. The plantwide rate is $5.00 per labor-hour. All direct labor at TTP is paid $36 per hour. Canvas and
nylon backpacks are produced in Department 1. Leather backpacks are produced in Department 2. The product costs (per backpack)
follow.
Direct materials
Direct labor
Overhead
Machine-hours
Labor-hours
Canvas
$31.00
93.60
Required:
a. Compute the total unit cost of each backpack model using the plantwide allocation method.
b. The machines in Department 1 are older and almost fully depreciated. The equipment in Department 2 was recently updated and
the process in Department 2 is more highly automated. At the request of the manager of Department 1, a cost analyst at TTP
provided the following Information on overhead costs, machine-hours and direct labor-hours for the two departments.
Nylon
$36.00
111.60
Department 1.
$ 79,520
17,200
22,400
Leather
$ 46.00
118.80
Canvas
Nylon
Leather
Using labor-hours as the department allocation base for Department 1 and machine-hours as the department allocation base for
Department 2, compute the allocation rate for each.
Department 2
$ 104,920
24,400
12, 200
c. Compute the unit cost of each model of backpack using the department allocation rates computed in requirement (b) (labor-hours in
Department 1 and machine-hours in Department 2).
Note: Do not round your Intermediate calculations.
Complete this question by entering your answers in the tabs below.
Required B Required C
Required A
Compute the total unit cost of each backpack model using the plantwide allocation method.
Note: Do not round your intermediate calculations. Round your answers to 2 decimal places.
Total Unit Cost
< Required A
Required B >
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