Randi Garner, owner of Garner Office Designs of 4-2, noticed that many of her clients had similar computers, and the desks for this part of the installation were virtually the same from one installation to another. She decided to start a separate company. Garner Office Furniture, to make and sell separate computer desks. These desks are a standard size with a keyboard drawer under the desk, three drawers on the side for stationery, and so on. In its first three months in business. Garner Office Furniture experienced the following;

Required:
1. Should Garner Office Furniture use process costing or job-order costing? Explain.
2. If Garner Office Furniture uses an actual costing system, what is the cost of a single desk produced in June? In July? In August?
3. Now assume that Garner Office Furniture uses a normal costing system. Estimated over¬
head for the year is $300,000, and estimated production is 6,000,desks. What is the pre¬
determined overhead rate per desk? What is the cost of a single desk produced in June?
In July? In August?

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June July August Number of desks produced 100 200 400 Direct materials used $7,500 $15,000 $30,000 Direct labor incurred $6,000 $12,000 $24,000 Overhead $45,000 $20,000 $24,800