Question

Adams Corporation estimated its overhead costs would be $22,600 per month except for January when it pays the $170,400 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $193,000 ($170,400 + $22,600). The company expected to use 7,600 direct labor hours per month except during July, August, and September when the company expected 9,200 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 3,800 units of product in each month except July, August, and September, in which it produced 4,600 units each month. Direct labor costs were $24.10 per unit, and direct materials costs were $11.00 per unit.

Required

1. Calculate a predetermined overhead rate based on direct labor hours.

2. Determine the total allocated overhead cost for January, March, and August.

3. Determine the cost per unit of product for January, March, and August.

4. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.60 per unit.

Answer 1

Month	OVERHEAD COST $	OVERHEAD COST(without Insurance premium) $	Annual premium allocated equally	Total Overhead	Direct Labour Hour	Overhead rate based on direct Labour Hours	production unit	Overhead cost per unit	per unit Labour cost	per unit material cost	total cost	Margin Required	Selling price in $
1	2	3	4	5	6	7	8	9	10	11	12	13	14
JAN (INSURANCE premium+over head)	193000	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
FEB	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
MAR	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
APRIL	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
MAY	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
JUNE	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
JULY	22600	22600	14200	36800	9200	4.00	4600	8.00	24.1	11	43.10	21.6	64.70
AUGS	22600	22600	14200	36800	9200	4.00	4600	8.00	24.1	11	43.10	21.6	64.70
SEPT	22600	22600	14200	36800	9200	4.00	4600	8.00	24.1	11	43.10	21.6	64.70
OCT	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
NOV	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
DEC	22600	22600	14200	36800	7600	4.84	3800	9.68	24.1	11	44.78	21.6	66.38
Answers:
a) Please see column No.7 given above
b) Please see column No.5 highlighted
c) Please see column No. 12
d) Please see column No.14
				ekkarill92 Next > < Previous Related Solutions Rooney Corporation estimated its overhead costs would be $22,600 per month except for January when it... Rooney Corporation estimated its overhead costs would be $22,600 per month except for January when it pays the $134,520 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $157,120 ($134,520 + $22,600). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the company expected 9,100 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Campbell Corporation estimated its overhead costs would be $22,700 per month except for January when it... Campbell Corporation estimated its overhead costs would be $22,700 per month except for January when it pays the $206,820 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $229,520 ($206,820 + $22,700). The company expected to use 7,600 direct labor hours per month except during July, August, and September when the company expected 9,800 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Walton Corporation estimated its overhead costs would be $22,200 per month except for January when it... Walton Corporation estimated its overhead costs would be $22,200 per month except for January when it pays the $213,600 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $235,800 ($213,600 + $22,200). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,500 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Munoz Corporation estimated its overhead costs would be $23,900 per month except for January when it... Munoz Corporation estimated its overhead costs would be $23,900 per month except for January when it pays the $120,180 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $144,080 ($120,180 + $23,900). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,800 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Franklin Corporation estimated its overhead costs would be $23,100 per month except for January when it... Franklin Corporation estimated its overhead costs would be $23,100 per month except for January when it pays the $192,240 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $215,340 ($192,240 + $23,100). The company expected to use 7,700 direct labor hours per month except during July, August, and September when the company expected 9,500 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Velez Corporation estimated its overhead costs would be $50,000 per month except for January when it... Velez Corporation estimated its overhead costs would be $50,000 per month except for January when it pays the $30,000 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $80,000 ($30,000 + $50,000). The company expected to use 7,000 direct labor hours per month except during July, August, and September when the company expected 9,000 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Baird Corporation estimated its overhead costs would be $22,400 per month except for January when it... Baird Corporation estimated its overhead costs would be $22,400 per month except for January when it pays the $219,240 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $241,640 ($219,240 + $22,400). The company expected to use 7,800 direct labor hours per month except during July, August, and September when the company expected 9,800 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Zachary Corporation estimated its overhead costs would be $22,700 per month except for January when it... Zachary Corporation estimated its overhead costs would be $22,700 per month except for January when it pays the $167,820 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $190,520 ($167,820 + $22,700). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,400 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Thornton Corporation estimated its overhead costs would be $23,300 per month except for January when it... Thornton Corporation estimated its overhead costs would be $23,300 per month except for January when it pays the $182,880 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $206,180 ($182,880 + $23,300). The company expected to use 7,900 direct labor hours per month except during July, August, and September when the company expected 9,100 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... Walton Corporation estimated its overhead costs would be $22,700 per month except for January when it... Walton Corporation estimated its overhead costs would be $22,700 per month except for January when it pays the $138,000 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $160,700 ($138,000 + $22,700). The company expected to use 7,100 direct labor hours per month except during July, August, and September when the company expected 9,100 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season.... ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions What are the benefits of doing a pilot program before a full scale rollout of a... It is a calm summer day in southeast Iowa at the Ottumwa air traffic control radar... 1. Write a detailed article on Evolution of attacks on the internet & web [your article... Analyze the role of the contingency plan coordinator (CPC) in the scope of preparing a BIA.... Amazing Manufacturing, Inc., has been considering the purchase of a new manufacturing facility for $500,000. The... LANGUAGE: JAVA Create a New Project called YourLastNameDomainName. Write a DomainName class that encapsulates the concept... On January 1, 2015 $20,000,000 of 20 year bonds were issued with a coupon rate of... ADVERTISEMENT About @ 2020 WizEdu