Question

1. 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		1,250			150			1,400
Machine-hours		5,000			2,000			7,000
Direct labor-hours		4,000			2,000			6,000
Direct materials costs	$	11,000		$	3,500		$	14,500
Direct labor costs		63,000			35,000			98,000
Manufacturing overhead costs								170,422
Total costs							$	282,922

Required:

Compute the individual product costs per unit assuming that Tiger Furnishings uses machine-hours to allocate overhead to the products. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

	Unit Cost Basic Dominator

2. Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production of 150,000 gallons of paint in July and completes 120,000 gallons. The costs of the resources used by Sanchez in July consist of the following:

Materials	$	137,000
Conversion costs (labor and overhead)		175,000

Required:

The production supervisor estimates that the ending work-in-process is 16 percent complete. Compute the cost of paint transferred to finished goods and the amount in work-in-process ending inventory as of July 31. (Do not round intermediate calculations.)

Cost of paint transferred to finished goods________________

Work-in-process ending inventory__________________

Answer 1

Answers

• Requirement 1: Unit Cost

	Basic	Dominator
Direct Materials cost	$11,000	$3,500
Direct Labor cost	$63,000	$35,000
Manufacturing Overhead	$121,730	$48,692
Total Product cost (A)	$195,730	$87,192
Unit produced (B)	1,250	150
Unit Cost (A/B) = Answer	$                     156.58	$                                  581.28

--Working

	Basic	Dominator
Direct Materials cost	11000	3500
Direct Labor cost	63000	35000
Manufacturing Overhead	=+(170422/7000)*5000	=+(170422/7000)*2000

• Requirement 2

--Working

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	120,000	100%	120,000	100%	120,000
Units of ENDING WIP	30,000	100%	30,000	16%	4,800
Equivalent Units of Production			150,000		124,800

--Answers

Cost of Paint transferred to finished goods = [(120000 units x $137000/150000)+(120000 units x $ 175000/124800 units)]
= 109600 + 168269
= $ 277869

Work in Process ending inventory = [(30000 units x $137000/150000)+(4800 units x $ 175000/124800 units)]
= 27400 +6731
= $ 34131