Question
Finch Manufacturing Company produced 1,400 units of inventory in January year 2. It expects to produce an additional 8,800 units during the remaining 11 months
Finch Manufacturing Company produced 1,400 units of inventory in January year 2. It expects to produce an additional 8,800 units during the remaining 11 months of the year. In other words, total production for year 2 is estimated to be 10,200 units. Direct materials and direct labor costs are $80 and $58 per unit, respectively. Finch expects to incur the following manufacturing overhead costs during the year 2 accounting period.
Production supplies | $ | 5,300 | |
Supervisor salary | 187,000 | ||
Depreciation on equipment | 130,000 | ||
Utilities | 24,000 | ||
Rental fee on manufacturing facilities | 186,650 | ||
Required
A) Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units.
B) Determine the cost of the 1,400 units of product made in January.
A) Predetermined overhead rate: ______ per unit
B) Allocated Cost
Indirect overhead costs ___________
Direct materials ____________
Direct labor ___________
Total $___________
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