Select the appropriate cost drivers for the indirect costs and allocate these costs to Departments M…


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Select the appropriate cost drivers for the indirect costs and allocate these costs to Departments M… 1 answer below » Cost accumulation and allocation Maller Manufacturing Company makes two different products, M and N. The company’s two departments are named after the products; for example, Product M is made in Department M. Maller’s accountant has identified the following annual costs associated with these two products. View complete question » Financial data Salary of vice president of production division $180,000 Salary of supervisor Department M 76,000 Salary of supervisor Department N 56,000 Direct materials cost Department M 300,000 Direct materials cost Cost accumulation and allocation Maller Manufacturing Company makes two different products, M and N. The company’s two departments are named after the products; for example, Product M is made in Department M. Maller’s accountant has identified the following annual costs associated with these two products. Financial data Salary of vice president of production division $180,000 Salary of supervisor Department M 76,000 Salary of supervisor Department N 56,000 Direct materials cost Department M 300,000 Direct materials cost Department N 420,000 Direct labor cost Department M 240,000 Direct labor cost Department N 680,000 Direct utilities cost Department M 120,000 Direct utilities cost Department N 24,000 General factorywide utilities 36,000 Production supplies 36,000 Fringe benefits 138,000 Depreciation 720,000 Nonfinancial data Machine hours Department M 5,000 Machine hours Department N 1,000 Required a. Identify the costs that are (1) direct costs of Department M, (2) direct costs of Department N, and (3) indirect costs. b. Select the appropriate cost drivers for the indirect costs and allocate these costs to Departments M and N. c. Determine the total estimated cost of the products made in Departments M and N. Assume that Maller produced 2,000 units of Product M and 4,000 units of Product N during the year. If Maller prices its products at cost plus 30 percent of cost, what price per unit must it charge for Product M and for Product N? View less » Jul 24 2014 07:52 AM

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