Question
Allocation to accomplish smoothing Baird Corporation estimated its overhead costs would be $23,500 per month except for January when it pays the $162,360 annual insurance
Allocation to accomplish smoothing
Baird Corporation estimated its overhead costs would be $23,500 per month except for January when it pays the $162,360 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $185,860 ($162,360 + $23,500). The company expected to use 7,400 direct labor hours per month except during July, August, and September when the company expected 10,000 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 3,700 units of product in each month except July, August, and September, in which it produced 5,000 units each month. Direct labor costs were $24.90 per unit, and direct materials costs were $10.40 per unit. Required
- Calculate a predetermined overhead rate based on direct labor hours.
- Determine the total allocated overhead cost for January, March, and August.
- Determine the cost per unit of product for January, March, and August.
- Determine the selling price for the product, assuming that the company desires to earn a gross margin of $20.20 per unit.
Complete this question by entering your answers in the tabs below. Req A Reqs B to D Calculate a predetermined overhead rate based on direct labor hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per labor hour Complete this question by entering your answers in the tabs below. Req A Reqs B to D Determine the total allocated overhead cost, the cost per unit of product and the selling price for the product for January, March, and August. Assume that the company desires to earn a gross margin of $20.20 per unit. (Do not round intermediate calculations. Round "Cost per unit" and "Price" to 2 decimal places.) January March August Total allocated overhead cost Cost per unit Price
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