Question

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead costs Total costs Basic 1,250 4,000 3,000 $10,000 70,000 Dominator 300 2,000 2,000 $ 3,750 34,000 Total 1,550 6,000 5,000 $ 13,750 104,000 177,112 $ 294,862 Required: Compute the individual product costs per unit assuming that Tiger Furnishings uses direct labor costs to allocate overhead to the products. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Unit Cost Basic Dominator

Answer 1

Overhead allocation rate = Overhead cost / labor cost
=$177112/104000
=170.30% of direct cost
	Basic	Dominator
Direct Material cost	$           10,000	$         3,750
Direct Labor Cost	$           70,000	$       34,000
Overhead cost(170.30% of direct labor)	$       1,19,210	$       57,902
Total Cost	$       1,99,210	$       95,652
Divided by :Number of units produced	1250	300
Cost per unit	$           159.37	$       318.84