Question

Munoz Sporting Equipment manufactures baseball bats and tennis rackets Department produces the babbats, and Department produces the bes products Direct labor cost is the allocation base. The rate used is 200 percent of de labor cost Last year evenema n d direct labor were as follows Tennis Rackets t Munct cur ses de contactes overhead to Required: a. Compute the profit for each product using plantwide allocation Preth I Baseball Bats Tennis Racks b. Maria The manager of Department was convinced that takes were reatore probable than baseball She e r comun accounting to break down ne overcoss the that had department rates benned Departmes would have had are of 150 percent of or cost and Department would have had a rate of 200 percent of directo come p department's location rate based on decor cost) depares she covered reach i ng Tennis Rackets

Answer 1

A)

	Baseball bats		Tennis Rackets
Sales revenue		1640000		900000
Less:
Direct labor	360000		180000
Direct material	550000		284000
overhead allocated	360000*200%= 720000		180000*200%= 360000
Total cost		(1630000)		(824000)
Profit /(loss)		10000		76000

b)

	Baseball bats		Tennis Rackets
Sales revenue		1640000		900000
Less:
Direct labor	360000		180000
Direct material	550000		284000
overhead allocated	360000*150%= 540000		180000*200%= 360000
Total cost		(1450000)		(824000)
Profit /(loss)		190000		76000