Problem 3 (25 points) Friendly Company produces a single product. Recently, the company received a special order from a large national public corporation that wants to purchase 900 units of the company's product at $110 each. Friendly Company's usual individual orders are no more than 25 units. So, this proposed 900-unit order is much larger than their usual order. The order will not affect the selling price to regular customers. Friendly Company's income statement for the past month is as follows: Sales Cost of goods sold Gross profit Selling and administrative expenses Net income Number of units sold $350,000 252,000 $98,000 30,000 $68.000 2.500 There was no beginning or ending inventories of work-in-process or finished goods. For the month presented, the company's detailed cost analysis is: Operating Cost Analysis Total Per unit $60,000 $24.00 72,000 28.80 120,000 48.00 $252,000 $100.80 30,000 $282.000 12.00 $112.80 Direct materials Direct labor Manufacturing overhead Total Production Cost Selling and administrative expenses Total Fixed manufacturing overhead is 45% of total manufacturing overhead and fixed selling and administrative expenses are 50% of that category. Prodigimt (20 in its production process, Oxford Corporation has four categories of overhead. Below is a schedule of their fiscal year 20x1 budgeted overhead costs and budgeted overhead cost driver activity for each overhead category: Overhead Item Overhead Items and Related Cost Drivers Setup costs Ordering costs Maintenance Power Budgeted Costs $583,200 Cost Driver Number of setups Budgeted Quantity 2,400 270,000 Number of orders 20,000 928,000 90,000 Machine-hours Kilowatt-hours 32,000 200,000 Oxford Corporation follows a job order cost system. Currently, in-house they have two activity production jobs. Following is a schedule detailing cost and cost driver activity for January 20x1 Actual Cost, Units Produced & Cost Driver Activity For month-ending January 20x1 Job 626 Job 27 Direct production costs k Direct materials $9,000 $10,000 Direct labor $12,000 $7,000 Actual units produced and cost driver activity Units produced 750 600 Direct labor-hours 45 110 Number of setups 6 7 Number of orders 8 15 Machine-hours 180 150 Kilowatt-hours 90 120 Required a Prepare a schedule showing the cost driver allocation rates for allocating Oxford's overhead cost to Job 626 and Job 627. (Round amounts to 2 decimal places.) b. Using the allocation rates derived above, allocate the overhead cost to each of Job 626 and Job 627. arbele detailing Total Production Cost and Production Cost per unit for each of Job 626 and 1541