Texts: Real Cool produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows.
Department Assembly Finishing
Budgeted Cost Allocation Base $284,000 Machine hours 21,000 Direct labor hours
Budgeted Usage
7,100 machine hours 4,200 direct labor hours
Additional production information for two models of its air conditioners follows:
Per unit Selling price Direct materials Direct labor
Model A $510 155 205
Model T $490 145 215
Model A 300 2MH 3 DLH
Model T 400 3.5MH 4 DLH
Units produced Assembly machine hours per unit Finishing direct labor hours per unit
1a. Compute departmental overhead rates and determine overhead cost per unit for each model.
1b. Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs.
2. Compute the total product cost per unit for each model.
Complete this question by entering your answer in the table below.
Req 1A
Req 1B
Req 2
Req 3
Compute departmental overhead rates and determine overhead cost per unit for each model:
Assembly department overhead rate Finishing department overhead rate
per MH per DLH
Req 1A
Req 1B
Req 1A
Req 1B
Req 2
Req 3
Use machine hours to allocate budgeted Assembly costs and use direct labor hours to allocate budgeted Finishing costs. Note: Round "Hours per unit" to one decimal place.
Departmental Overhead Rate
Model A
Model T
Overhead Hours per Unit
Hours per Unit
Assembly Finishing Totals
0
0
Req 1A
Req 1B
Req 2
Req 3
Compute the total product cost per unit for each model:
Per Unit
Direct Materials
Direct Labor
Overhead
Product Cost per Unit
Model A Model T
Req 1A
Req 1B
Req 2
Req 3
For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). Note: A negative gross profit should be indicated with a minus sign.
Per Unit Model A Model T
Selling Price
Product Cost
Gross Profit