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Donovan & Parents produces soccer shorts and jerseys for youth leagues. Most of the production is done by machine. Data on operations and costs for March follow:
Jerseys Shorts Total
Units produced 32,000 16,000 48,000
Machine-hours used 6,000 4,800 10,800
Direct labor-hours 1,200 720 1,920
Direct materials costs $ 96,000 $ 64,000 $ 160,000
Direct labor costs $ 32,800 $ 19,200 $ 52,000
Manufacturing overhead costs $ 266,400
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 $ 48,000 Machine-hours
Supplies 33,600 Materials
Machine depreciation and maintenance 105,600 Machine-hours
Purchasing and storing materials 38,400 Materials
Miscellaneous 40,800 Machine-hours
Required:
a. Compute the predetermined overhead rates assuming that Donovan uses machine-hours to allocate machine-related overhead costs and materials costs to allocate materials-related overhead costs. (Enter «Materials related overhead» as a whole percentage (i.e., 32).)
overhead rate
machine-hour related per hour
materials related per hour
b. Compute the total costs of production and the cost per unit for each of the two products for March. (Round «Cost per unit» to 2 decimal places.)
jerseys shorts
total cost
cost per unit