Reference no: EM132822872

Question - 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 11,000 5,700 16,700

Machine-hours used 1,030 770 1,800

Direct labor-hours 220 100 320

Direct materials costs $11,000 $9,000 $20,000

Direct labor costs $4,400 $2,000 $6,400

Manufacturing overhead costs $24,640

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 $4,020

Machine-hours Supplies 2,800

Materials Machine depreciation and maintenance 10,240

Machine-hours Purchasing and storing materials 4,200

Materials Miscellaneous 3,380 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.

b. Compute the total costs of production and the cost per unit for each of the two products for March.