Tiger Furnishings produces two models of cabinets

Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:

Basic Dominator Total
  Units produced 1,420 440 1,860
  Machine-hours 3,300 2,700 6,000
  Direct labor-hours 2,900 3,300 6,200
  Direct materials costs $ 16,000 $ 5,450 $ 21,450
  Direct labor costs 63,500 51,500 115,000
  Manufacturing overhead costs 194,510
       Total costs $ 330,960


Tiger Furnishings’s CFO believes that a two-stage cost allocation system would give managers better cost information. She asks the company’s cost accountant to analyze the accounts and assign overhead costs to two pools: overhead related to direct labor cost and overhead related to machine-hours.

The analysis of overhead accounts by the cost accountant follows:

 Manufacturing Overhead Overhead
  Cost Pool Assignment
  Utilities $ 1,500   Machine-hour related
  Supplies 4,600   Direct labor cost related
  Training 9,200   Direct labor cost related
  Supervision 25,800   Direct labor cost related
  Machine depreciation 23,000   Machine-hour related
  Plant depreciation 23,500   Machine-hour related
  Miscellaneous 106,910   Direct labor cost related



Compute the product costs per unit assuming that Tiger Furnishings uses direct labor costs and machine-hours to allocate overhead to the products. (Do not round the direct-labor cost rate in your intermediate calculations. Round your answers to two decimal places.)

Here’s the SOLUTION

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