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Exercise 12-12A (Algo) How the allocation of fixed cost affects a pricing decision LO 123 Adams Manufacturing Co. expects to make 30,500 chairs during the
Exercise 12-12A (Algo) How the allocation of fixed cost affects a pricing decision LO 123 Adams Manufacturing Co. expects to make 30,500 chairs during the year 1 accounting period. The company made 4,000 chairs in January. Materials and labor costs for January were $17,500 and $24,700, respectively. Adams produced 1,900 chairs in February. Material and labor costs for February were $9,000 and $12,500, respectively. The company paid the $762,500 annual rental fee on its manufacturing facility on January 1 , year 1 . The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Adams desires to sell its chairs for cost plus 45 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.) Exercise 12-3A (Algo) Allocating overhead cost to accomplish smoothing LO 122 Stuart Corporation expects to incur indirect overhead costs of $98,800 per month and direct manufacturing costs of $13 per unit. The expected production activity for the first four months of the year are as follows. Required a. 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. b. Allocate overhead costs to each month using the overhead rate computed in Requirement a. c. Calculate the total cost per unit for each month using the overhead allocated in Requirement b. x Answer is not complete. Complete this question by entering your answers in the tabs below. Calculate the total cost per unit for each month using the overhead allocated in Requirement b
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