Question
kenta manufacturing company produced 800 units of inventory in january year 2. the company expects to produce an additional 7200 units of inventory during the
kenta manufacturing company produced 800 units of inventory in january year 2. the company expects to produce an additional 7200 units of inventory during the remaining 11 months of the year, for a total estimated production of 8,000 units in year 2. direct materials and indirect labor costs are $60 and $75 per unit, respectively. Kenta expects to incur the following manufacturing overhead costs during the year 2 accounting period.
indirect materials : $6000
depreciation on equip: $24000
utilities cost : 11,000
salaries of plant manager and staff: 96000
rental fee on manufacturing facilities: 23000
required:
a; combine the indiv overhead cost into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units.
b; determine the estimated cost of 800 units of product made in January
c; is the cost computed in requirement b actual or estimated? could kent improve accuracy by waiting until december to determine the cost of products? identify two reasons that a manager would want to know the cost of product in january. discuss the relationship between accuracy and relevance as it pertains to this problem .
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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