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 $28 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 Canvas $23.00 50.40 Nylon $28.00 64.40 Leather $38.00 70.00 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. Overhead Machine-hours Labor-hours Department 1 $ 60,480 15,600 19,200 Department 2 $91,160 21,200 10,600 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. 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 Canvas Nylon Leather
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 $28 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 Canvas $23.00 50.40 Nylon $28.00 64.40 Leather $38.00 70.00 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. Overhead Machine-hours Labor-hours Department 1 $ 60,480 15,600 19,200 Department 2 $91,160 21,200 10,600 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. 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 Canvas Nylon Leather
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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 $28 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
Canvas
$23.00
50.40
Nylon
$28.00
64.40
Leather
$ 38.00
70.00
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.
Overhead
Machine-hours
Labor-hours
Department 1
$ 60,480
15,600
19,200
Department 2
$ 91,160
21,200
10,600
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.
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
Canvas
Nylon
Leather
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Step 1: Introduction to Schedule Of Cost Of Goods Manufactured
VIEWStep 2: Computation of Overhead Cost Per Unit.
VIEWStep 3: REQ A:Statement Showing total unit cost of each backpack model using the plantwide allocation method
VIEWStep 4: WORKING NOTE 2 :Statement Showing Computation of Overhead Allocation Rate for Each Department.
VIEWStep 5: REQUIREMENT B :— Overhead Allocation Rate for Each Department.
VIEWStep 6: WORKING NOTE 3 :— Statement Showing Computation of Overhead Unit Cost of Each Model.
VIEWStep 7: REQUIREMENT C :— Computation of Unit Cost of Each Model.
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