Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high-quality hand-finishing. Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine-hours in Forming and direct labour cost in Finishing. Information related to estimated volumes and denominator values for the coming year are provided below: Annual production and sales Direct materials per unit Direct labour cost per unit: Forming Department Finishing Department Machine hours per unit: Forming Department Finishing Department Forming Finishing Tennis Racquets 6,500 $4.80 per MH per DLS Total cost per unit $9.00 $5.00 0.75 0.25 Golf Clubs 10,250 In addition, the firm budgets manufacturing overhead at $74,500 in the Forming Department and $60,000 in the Finishing Department. $3.90 Required: 1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.) $5.00 $9.00 Tennis Racquets Golf Clubs 0.25 0.50 2. Determine the total cost per unit of tennis racquets and golf clubs. (Round your answers to 2 decimal places.)
Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high-quality hand-finishing. Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine-hours in Forming and direct labour cost in Finishing. Information related to estimated volumes and denominator values for the coming year are provided below: Annual production and sales Direct materials per unit Direct labour cost per unit: Forming Department Finishing Department Machine hours per unit: Forming Department Finishing Department Forming Finishing Tennis Racquets 6,500 $4.80 per MH per DLS Total cost per unit $9.00 $5.00 0.75 0.25 Golf Clubs 10,250 In addition, the firm budgets manufacturing overhead at $74,500 in the Forming Department and $60,000 in the Finishing Department. $3.90 Required: 1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.) $5.00 $9.00 Tennis Racquets Golf Clubs 0.25 0.50 2. Determine the total cost per unit of tennis racquets and golf clubs. (Round your answers to 2 decimal places.)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 4E: Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and...
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented
forming process and high-quality hand-finishing. Products move through two production
departments: Forming and Finishing. The company uses departmental overhead rates to
allocate overhead costs. Overhead is allocated based on machine-hours in Forming and
direct labour cost in Finishing. Information related to estimated volumes and
denominator values for the coming year are provided below:
Annual production and
sales
Direct materials per
unit
Direct labour cost per
unit:
Forming Department
Finishing Department
Machine hours per unit:
Forming Department
Finishing Department
Forming
Finishing
Tennis
Racquets
6,500
$4.80
per MH
per DLS
Total cost per unit
$9.00
$5.00
0.75
0.25
Golf Clubs
In addition, the firm budgets manufacturing overhead at $74,500 in the Forming
Department and $60,000 in the Finishing Department.
10,250
$ 3.90
Required:
1. Determine the overhead application rate for each department. (Round your answers
to 2 decimal places.)
$5.00
$9.00
0.25
0.50
Tennis Racquets Golf Clubs
2. Determine the total cost per unit of tennis racquets and golf clubs. (Round your
answers to 2 decimal places.)
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