Munoz Sporting Equipment manufactures baseball bats and tennis rackets. Department B produces the baseball bats, and...

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Munoz Sporting Equipment manufactures baseball bats and tennis rackets. Department B produces the baseball bats, and Departme

Sales revenue Direct labor Direct materials Baseball Bats Tennis Rackets $1,460,000 $950,000 300,000 150,000 557,000 281,000

b. Maria, the manager of Department T, was convinced that tennis rackets were really more profitable than baseball bats. She

Profit Baseball Tennis Bats Rackets a. b. Using plantwide allocation Using departments allocation rate

business accounting

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Answer 1

Answer #1

Required a :	Using plantwide allocation

	Baseball bats	Tennis rackets
Direct materials	557000	281000
Direct labor	300000	150000
Overhead allocated ( @ 150% of direct labor cost )	450000	225000
Total manufacturing cost	1307000	656000

	Baseball bats	Tennis rackets
Sales revenue	1460000	950000
(-) Total manufacturing cost	1307000	656000
Profit	153000	294000

Required b :	Using department's allocated rate

	Baseball bats	Tennis rackets
Direct materials	557000	281000
Direct labor	300000	150000
Overhead allocated	300000 [ 300000 * 100% ]	375000 [ 150000 * 250% ]
Total manufacturing cost	1157000	806000

	Baseball bats	Tennis rackets
Sales revenue	1460000	950000
(-) Total manufacturing cost	1157000	806000
Profit	303000	144000

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Answer 2

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