Question

Racquet 5.909 $ 5.41 Club 9.350 4.38 Annual production and sales (units) Direct materials cost per unit Direct labour cost per unit: Forming Department Finishing Department Machine hours per unit: Forming Department Finishing Department 4.50 $ $ 5.00 7.50 $ 0.25 . In addition, the firm budgets manufacturing overhead at $49,250 in the Forming Department and $55,500 in the Finishing Department Required: 1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.) per MH Forming Finishing per DLS 12. Determine the total cost per unit of tennis racquets and golf clubs. (Round your intermediate calculations and final answers decimal places.) Tennis Racquets Golf Clubs Total cost per unit < Prex 3 of 7 Next >

Answer 1

Solution a
Finishing department
	Units	Labor cost per unit	Total labor cost
	A	B	C=A*B
Racquets	5,900	$                 7.50	$    44,250.00
Golf clubs	9,350	$                 8.00	$    74,800.00
		Total labor cost	$ 119,050.00
Overhead cost in finishing department		$             55,500
Labor cost in finishing department		$          119,050
Application rate=	Overhead cost/labor cost
Application rate=	55500/119050
Application rate=	$      0.47	Per direct labor cost in dollars
Forming department
	Units	Machine hours per unit	Total Machine hours
	A	B	C=A*B
Racquets	5,900	0.25	1,475.00
Golf clubs	9,350	0.25	2,337.50
		Total labor cost	3,812.50
Overhead cost in forming department		$             49,250
Total Machine hours		3,812.50
Application rate=	Overhead cost/Machine hours
Application rate=	49250/3812.50
Application rate=	$    12.92	Per Machine hour
Solution b	Rachquets		Golf Clubs
	Per unit	Total cost	Per unit	Total cost
Units	5900		9350
Direct Material	$      5.40	$       31,860.00	$              4.30	$    40,205.00
Direct labor cost
Forming	$      5.00	$       29,500.00	$              4.50	$    42,075.00
Finishing	$      7.50	$       44,250.00	$              8.00	$    74,800.00
Overheads
Forming (5900*0.25*12.92)		$       19,054.10
Forming (9350*0.25*12.92)				$    30,195.90
Finishing- ((29500+44250)*0.47)		$       34,381.56
Finishing- ((42075+74800)*0.47)				$    54,486.04
Total cost		$    159,045.66		$ 241,761.94
No of units		5900		9350
Cost per unit		$               26.96		$           25.86