Adams Corporation estimated its overhead costs would be $23,000 per month except for January when it pays the $179,400 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $202,400 ($179,400 + $23,000). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the company expected 9,900 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,850 units of product in each month except July, August, and September, in which it produced 4,950 units each month. Direct labor costs were $23.80 per unit, and direct materials costs were $11.50 per unit. Required a. Calculate a predetermined overhead rate based on direct labor hours. b. Determine the total allocated overhead cost for January, March, and August. c. Determine the cost per unit of product for January, March, and August. d. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.50 per unit. Complete this question by entering your answers in the tabs below. Req A Req B to D b. Determine the total allocated overhead cost for January, March, and August. c. Determine the cost per unit of product for January, March, and August. d. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.50 per unit. Note: Do not round intermediate calculations. Round "Cost per unit" and "Selling price per unit" to 2 decimal places. Round your total allocated overhead cost to nearest whole dollar. b. Total allocated overhead cost c. Cost per unit d. Selling price per unit January < March Req A August Req B to D Show less A
Adams Corporation estimated its overhead costs would be $23,000 per month except for January when it pays the $179,400 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $202,400 ($179,400 + $23,000). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the company expected 9,900 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,850 units of product in each month except July, August, and September, in which it produced 4,950 units each month. Direct labor costs were $23.80 per unit, and direct materials costs were $11.50 per unit. Required a. Calculate a predetermined overhead rate based on direct labor hours. b. Determine the total allocated overhead cost for January, March, and August. c. Determine the cost per unit of product for January, March, and August. d. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.50 per unit. Complete this question by entering your answers in the tabs below. Req A Req B to D b. Determine the total allocated overhead cost for January, March, and August. c. Determine the cost per unit of product for January, March, and August. d. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.50 per unit. Note: Do not round intermediate calculations. Round "Cost per unit" and "Selling price per unit" to 2 decimal places. Round your total allocated overhead cost to nearest whole dollar. b. Total allocated overhead cost c. Cost per unit d. Selling price per unit January < March Req A August Req B to D Show less A
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Adams Corporation estimated its overhead costs would be $23,000 per month except for January when it pays the $179,400 annual
insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $202,400 ($179,400 +
$23,000). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the
company expected 9,900 hours of direct labor each month to build inventories for high demand that normally occurs during the
Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,850 units of
product in each month except July, August, and September, in which it produced 4,950 units each month. Direct labor costs were
$23.80 per unit, and direct materials costs were $11.50 per unit.
Required
a. Calculate a predetermined overhead rate based on direct labor hours.
b. Determine the total allocated overhead cost for January, March, and August.
c. Determine the cost per unit of product for January, March, and August.
d. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.50 per unit.
Complete this question by entering your answers in the tabs below.
Req A
Req B to D
b. Determine the total allocated overhead cost for January, March, and August.
c. Determine the cost per unit of product for January, March, and August.
d. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.50 per
unit.
Note: Do not round intermediate calculations. Round "Cost per unit" and "Selling price per unit" to 2 decimal places. Round
your total allocated overhead cost to nearest whole dollar.
b. Total allocated overhead cost
c. Cost per unit
d. Selling price per unit
January
<
March
Req A
August
Req B to D
>
Show less A
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