Problem

One of Sun Appliance's products is a dishwasher. Two processing departments are involv...

One of Sun Appliance's products is a dishwasher. Two processing departments are involved in the dishwasher's manufacture. The tub is assembled in one department, and a second department assembles and installs the motor. There is no beginning or ending work in process in either department. During March, the company incurred the following costs in the manufacture of 4.000 dishwashers.

 

Tub Department

Motor Department

Direct materials

$150,000

 

$96,000

Direct labor

12,000

 

18,000

Manufacturing overhead

18,000

6,000

Instructions

a. Compute the following per-unit costs for the month of March:

1.    A tub assembly transferred to the Motor Department.

2.    Assembling a motor and installing it.

3.    A completed dishwasher.

4.    Materials used in assembling a tub.

5.    Direct labor cost of assembling and installing a motor.


b. Which of these unit costs would be most useful to management in evaluating the overall monthly efficiency of the Motor Department? Explain your reasoning.

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