Loin Cabinetry produces two models of home shelving, the Basic and the Mega. Data on operations and costs for November are:
Basic Mega Total
Machine hours 8,000 4,000 12,000
Direct labor hours 6,000 4,000 10,000
Units produced 1,000 250 1,250
Direct materials costs $20,000 $ 7,500 $ 27,500
Direct labor costs 129,000 71,000 200,000
Manufacturing overhead costs 348,200
Total costs $575,700
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
(d) Compute the unit cost for each model using direct labor costs to allocate overhead.