Question
Campbell Corporation estimated its overhead costs would be $22,400 per month except for January when it pays the $190,860 annual insurance premium on the manufacturing
Campbell Corporation estimated its overhead costs would be $22,400 per month except for January when it pays the $190,860 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $213,260 ($190,860 + $22,400). 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. The companys 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 4,900 units each month. Direct labor costs were $24.00 per unit, and direct materials costs were $11.20 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 $21.60 per unit.
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 $21.60 per unit. (Do not round intermediate calculations. Round "Cost per unit" and "Selling price per unit" to 2 decimal places. Round your total allocated overhead cost to nearest whole dollar.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started