Adams Corporation expects to incur indirect overhead costs of $147,500 per month and direct manufacturing costs of $21 per unit. The expected production activity for the first four months of the year are as follows.

	January		February		March		April
Estimated production in units	5,000		7,900		3,800		6,900

Required

1. Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year.

2. Allocate overhead costs to each month using the overhead rate computed in Requirement a.

3. Calculate the total cost per unit for each month using the overhead allocated in Requirement b.

Calculate a predetermined overhead rate based on the number months of the year. Predetermined overhead rate per unit Allocate overhead costs to Month Allocated Cost January February March April Total Calculate the total cost per unit for each month using the overhead allocated in Requirement b. Month March January 5,000 February 7,900 April 6,900 Number of units 3,800 Expected cost Overhead Direct costs Total cost Cost per unit