Determine the total cost per unit of tennis racquets

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Reference no: EM132509472

Overhead Application

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 costs for last year is provided below:

Tennis Racquets Golf Clubs

Annual production and sales (units) 5,000 8,000

Direct materials cost per unit $4.50 $3.50

Direct labour cost per unit: Forming Department $3.00 $2.50

Finishing Department $6.00 $4.00

Machine hours per unit:

Forming Department 0.25 0.25

Finishing Department - 0.50

In addition, the firm budgets manufacturing overhead at $35,750 in the Forming Department and $46,500 in the Finishing Department.

Required:

Question 1. Determine the overhead application rate for each department. (Round your answers to 2 decimal places.)

Question 2. Determine the total cost per unit of tennis racquets and golf clubs. (Round your answers to 2 decimal places.)

Reference no: EM132509472

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