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Sportway Inc. produces high-quality tennis racquets and golf clubs using a patented forming process and high-quality hand-finishing. Products move...
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 estimated volumes and denominator values for the coming year are provided below:
Tennis RacquetsGolf Clubs Annual production and sales 5,200 8,300 Direct materials per unit$4.70 $3.60 Direct labour cost per unit: Forming Department$10.00 $4.50 Finishing Department$4.50 $6.00 Machine hours per unit: Forming Department 0.75 0.25 Finishing Department 0.25 0.50
In addition, the firm budgets manufacturing overhead at $55,000 in the Forming Department and $47,000 in the Finishing Department.
Required:1.Determine the overhead application rate for each department. (Round your answers to 2 decimal places.)
2.Determine the total cost per unit of tennis racquets and golf clubs. (Round your answers to 2 decimal places.)