Adams Corporation estimated its overhead costs would be $22,500 per month except for January when it pays the $212,160 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $234,660 ($212,160 + $22,500). 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. The companys actual direct labor hours were the same as the estimated hours. The company made 3,950 units of product in each month except July, August, and September, in which it produced 4,550 units each month. Direct labor costs were $24.60 per unit, and direct materials costs were $10.60 per unit.

Predetermined overhead rate per labor hour January March August Total allocated overhead cost Cost per unit Price