Question

Problem 6-53 (Static) Product Costing (LO 6-4)

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		1,000			250			1,250
Machine-hours		4,500			2,500			7,000
Direct labor-hours		3,000			2,000			5,000
Direct materials costs	$	10,000		$	3,750		$	13,750
Direct labor costs		64,500			35,500			100,000
Manufacturing overhead costs								175,000
Total costs							$	288,750

Required:

Compute the individual product costs per unit assuming that Tiger Furnishings uses machine-hours to allocate overhead to the products.

Find basic and dominator

Answer 1

ANSWER

Overhead rate = Manufacturing overhead costs/Total Machine hours $ 25 ($ 175,000 / 7,000 MHS) Direct material costs Direct labor costs Manufacturing overhead costs Total Costs Units produced Product cost per unit $ $ $ $ Basic Dominator 10,000 $ 3,750 $ 64,500 $ 35,500 $ 112,500 $ 62,500 $ 187,000 $ 101,750 $ 1,000 250 187 $ 407 Total 13,750 100,000 175,000 (4,500 MHS * $ 25) 288,750 (2,500 MHS * $ 25) ($ 187,000 / 1,000 units) ($ 101,750 / 250 units)

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