Problem: Loin Cabinetry produces two models of home shelving, the Basic-Super and the Mega-Super. Data on operations and costs for November are:
Basic-Super Mega-Super Total
Machine hours 8,000.00 4,000.00 12,000.00
Direct labor hours 6,000.00 4,000.00 10,000.00
Units produced 1,000.00 250.00 1,250.00
Direct material costs 20,000.00 7,500.00 27,500.00
Direct labor costs 129,000.00 71,000.00 200,000.00
Manufacturing overhead costs 348,200.00
Total costs 575,700.00
Required: Compute the predetermined overhead rate, assuming Loin Cabinetry uses:
(a) Direct labor hours to allocate overhead costs
(b) Direct labor costs to allocate overhead costs
(c) Machine hours to allocate overhead costs
Refer to (b). Compute the unit cost for each model.