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Question - Tent Master produces Pup tents and Pop-up tents. The company budgets $301,000 of overhead cost and 43,000 direct labor hours. Additional information follows.
Per Unit
Selling Price
Direct Materials
Direct Labor
Pup tent
$80
$21
$46
Pop-up tent
75
22
28
Required -
1. Compute a single plant-wide overhead rate assuming the company allocates overhead cost based on 43,000 direct labor hours.
2. Pup tents use 3 direct labor hours (DLH) per unit and Pop-up tents use 2 direct labor hours per unit. Compute the overhead cost per unit for each product.
3. Compute the product cost per unit for each product.
4. For each product, compute the gross profit per unit {selling price per unit minus the product cost per unit).
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