Tiger Furnishings produces two models of cabinets for home theater components answers solutions

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

250

1,500

  Machine-hours

5,000

3,000

8,000

  Direct labor-hours

2,000

2,000

4,000

  Direct materials costs

$

8,000

$

3,750

$

11,750

  Direct labor costs

63,000

35,000

98,000

  Manufacturing overhead costs

167,580

     Total costs

$

277,330

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 final answers to 2 decimal places. Omit the "$" sign in your response.)

    Unit Product
   Cost

  Basic

$      

  Dominator

$      

Basic

Dominator

Total

  Units produced

1,250

200

1,450

  Machine-hours

3,000

2,000

5,000

  Direct labor-hours

3,000

2,000

5,000

  Direct materials costs

$

10,000

$

3,750

$

13,750

  Direct labor costs

68,000

33,000

101,000

  Manufacturing overhead costs

173,316

     Total costs

$

288,066

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 final answers to 2 decimal places. Omit the "$" sign in your response.)

    Unit Product
   Cost

  Basic

$      

  Dominator

$      

  Mets Products produces baseball caps and T-shirts. Most of the production is done by machine. Data on operations and costs for October follow:

Baseball Caps

T-Shirts

Total

  Units produced

9,500

4,400

13,900

  Machine-hours used

970

780

1,750

  Direct labor-hours

220

140

360

  Direct materials costs

$

11,900

$

7,100

$

19,000

  Direct labor costs

$

4,400

$

2,800

$

7,200

  Manufacturing overhead costs

$

22,180

Management asks the firm's cost accountant to compute product costs. The accountant first assigns overhead costs to two pools: overhead related to direct materials and overhead related to machine-hours. The analysis of overhead accounts by the cost accountant follows:

  Account

Amount

Related to:

  Utilities

$

4,000

 Machine-hours

  Supplies

2,810

 Materials

  Machine depreciation and maintenance

8,690

 Machine-hours

  Purchasing and storing materials

3,270

 Materials

  Miscellaneous

3,410

 Machine-hours

Required:

(a)

Compute the predetermined overhead rates assuming that Mets Products uses machine-hours to allocate machine-related overhead costs and materials costs to allocate materials-related overhead costs. (Round your machine-related overhead rate to 2 decimal places. Omit the "$" and "%" signs in your response.)

Overhead rate

  Machine related

$ 

 per hour  

  Materials related

 %  

(b)

Compute the total costs of production and the cost per unit for each of the two products for October. (Do not round intermediate calculations. Round your cost per unit to 2 decimal places. Omit the "$" sign in your response.)

     Baseball Caps

         T-shirts

  Total cost

$      

$    

  Cost per unit

$      

$   

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

1,000

250

1,250  

  Machine-hours

4,000

2,000

6,000  

  Direct labor-hours

3,000

2,000

5,000  

  Direct materials costs

$

10,000

$

3,750

$

13,750  

  Direct labor costs

64,500

35,500

100,000  

  Manufacturing overhead costs

174,100  

       Total costs

$

287,850  

Tiger Furnishings’s CFO believes that a two-stage cost allocation system would give managers better cost information. She asks the company’s cost accountant to analyze the accounts and assign overhead costs to two pools: overhead related to direct labor cost and overhead related to machine-hours.

     The analysis of overhead accounts by the cost accountant follows:

  Manufacturing Overhead

Overhead
Estimate

  Cost Pool Assignment

  Utilities

$

1,800  

  Machine-hour related

  Supplies

5,000  

  Direct labor cost related

  Training

10,000  

  Direct labor cost related

  Supervision

25,800  

  Direct labor cost related

  Machine depreciation

32,000  

  Machine-hour related

  Plant depreciation

14,200  

  Machine-hour related

  Miscellaneous

85,300  

  Direct labor cost related

Required:

Compute the product costs per unit assuming that Tiger Furnishings uses direct labor costs and machine-hours to allocate overhead to the products. (Do not round the direct-labor cost rate in your intermediate calculations. Round your final answers to the nearest dollar amount.)

         Basic

         Dominator

  Unit Product Cost

$   

$   

The following transactions occurred in October at Pawnee Workshops, a custom manufacturer of furniture:

1. 

Purchased $16,000 of materials.

2. 

Issued $800 of supplies from the materials inventory.

3. 

Purchased $11,200 of materials.

4. 

Paid for the materials purchased in transaction (1).

5. 

Issued $13,600 in direct materials to the production department.

6. 

Incurred direct labor costs of $20,000, which were credited to Wages Payable.

7. 

Paid $21,200 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant.

8. 

Applied overhead on the basis of 125 percent of $20,000 direct labor costs.

9. 

Recognized depreciation on manufacturing property, plant, and equipment of $10,000.

The following balances appeared in the accounts of Pawnee Workshops for October:

Beginning

Ending

  Materials Inventory

$

29,640

  Work-in-Process Inventory

6,600

  Finished Goods Inventory

33,200

$

28,640

  Cost of Goods Sold

52,680

Required:

(a)

Prepare journal entries to record the transactions. (Omit the "$" sign in your response.)

Events

General Journal

Debit

Credit

1

  Materials inventory

       Accounts payable

2

  Manufacturing overhead control

       Materials inventory

3

  Materials inventory

       Accounts payable

4

  Accounts payable

       Cash

5

  Work-in-process-Direct materials

       Materials inventory

6

  Work-in-process-Direct labor

       Wages payable

7

  Manufacturing overhead control

       Cash

8

  Work-in-process-Overhead

       Applied manufacturing overhead

9

  Manufacturing overhead control

       Acc.dep.-property, plant and equipment

(b)

Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold. (Record the transactions in the given order. Omit the "$" sign in your response.)

Materials Inventory

  Balance 10/1

     2     

  1

     5     

  3

  Balance 10/31

Work-in-process inventory

  Balance 10/1

  5

Transfer to Finished Goods  

  6

  8 

  Balance 10/31

Manufacturing Overhead Control

  2

  7

  9

Applied Manufacturing Overhead

     8     

Accounts Payable

  4

     1     

     3     

Cash

     4    

     7    

Wages Payable

     6    

Accumulated Depreciation − Property, Plant, and Equipment

     9    

Finished Goods Inventory

  Balance 10/1

Transfer to Cost of Goods Sold

  Goods completed

  Balance 10/31

Cost of Goods Sold

  Balance 10/31

Partially completed T-accounts and additional information for Cardinals, Inc., for the month of November follow.

Materials Inventory

Work-In-Process Inventory

BB (11/1)   30,000  

BB (11/1)   60,000  

120,000  

  96,000

Labor        90,000  

Finished Goods Inventory

Cost of Goods Sold

BB (11/1)   80,000  

180,000  

  120,000

Manufacturing Overhead Control

Applied Manufacturing Overhead

78,000  

Additional information for November follows:

•

Labor wage rate was $30 per hour.

•

Manufacturing overhead is applied at $24 per direct labor-hour.

•

During the month, sales revenue was $270,000, and selling and administrative costs were $48,000.

•

This company has no indirect materials or supplies.

Required:

(a)

What cost amount of direct materials was issued to production during November? (Omit the "$" sign in your response.)

  Direct materials

$   

(b)

How much manufacturing overhead was applied to products during November? (Omit the "$" sign in your response.)

  Manufacturing overhead

$   

(c)

What was the cost of products completed during November? (Omit the "$" sign in your response.)

  Cost of products

$   

(d)

What was the balance of the Work-in-Process Inventory account at the end of November? (Omit the "$" sign in your response.)

  Work-in-Process Inventory

$   

(e)

What was the over- or underapplied manufacturing overhead for November? (Input the amount as a positive value. Omit the "$" sign in your response.)

  Manufacturing overhead

$   

 Underapplied

(f)

What was the operating profit for November? Any over- or underapplied overhead is written off to Cost of Goods Sold. (Omit the "$" sign in your response.)

  Operating profit

$   

•

Total manufacturing cost during the year was $3,000,000 based on actual direct material, actual direct labor, and applied manufacturing overhead.

•

Manufacturing overhead was applied to work in process at 75 percent of direct labor dollars. Applied manufacturing overhead for the year was 25 percent of the total manufacturing cost during the year.

Required:

Compute actual direct material used, actual direct labor, and applied manufacturing overhead. (Omit the "$" sign in your response.)

  Direct material used

$   

  Direct labor

  Manufacturing overhead applied

Tony's Textiles uses a predetermined factory overhead rate based on machine-hours. For May, Tony's budgeted overhead was $210,000 based on a budgeted volume of 35,000 machine-hours. Actual overhead amounted to $227,500 with actual machine-hours totaling 38,500.

Required:

What was over- or underapplied manufacturing overhead in May? (Input the amount as a positive value. Omit the "$" sign in your response.)

  Overapplied overhead

$