Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 81

Manufacturing overhead—multiple application bases Staley Toy Co. makes toy flutes. Two manufacturing overhead application bases are used; some overhead is applied on the basis of machine hours at a rate of $7.50 per machine hour, and the balance of the overhead is applied at the rate of 200% of direct labor cost.

Required:

a. Calculate the cost per unit of February production of 4,260 toy flutes that required 1. Raw materials costing $2,880.

2. 108 direct labor hours costing $1,836.

3. 180 machine hours.

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b. At the end of February, 3,930 of these toy flutes had been sold. Calculate the ending inventory value of the toy flutes still in inventory at February 28.

Step 1 of 4

Manufacturing overhead as multiple application bases

By extracting the information: