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Sarnia Ltd . is a manufacturing company that produces a single product. The company keeps meticulous records of manufacturing activities from which the following information

Sarnia Ltd. is a manufacturing company that produces a single product. The company keeps meticulous records of manufacturing activities from which the following information has been extracted:

MarchLow JuneHigh

Number of units produced 6,0209,030

Cost of goods manufactured $ 171,360 $ 264,000

Work in process inventory, beginning $ 10,800 $ 38,400

Work in process inventory, ending $ 18,000 $ 25,200

Direct materials cost per unit $ 66

Direct labour cost per unit $ 1010

Manufacturing overhead cost, total ??

The companys manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost varies with the number of units produced versus how much is fixed per month.

Required:

For both March and June, estimate the amount of manufacturing overhead cost added to production.Sarnia Ltd. is a manufacturing company that produces a single product. The company keeps meticulous records of manufacturing activities from which the following information has been extracted:

MarchLow JuneHigh

Number of units produced 6,0209,030

Cost of goods manufactured $ 171,360 $ 264,000

Work in process inventory, beginning $ 10,800 $ 38,400

Work in process inventory, ending $ 18,000 $ 25,200

Direct materials cost per unit $ 66

Direct labour cost per unit $ 1010

Manufacturing overhead cost, total ??

The companys manufacturing overhead cost consists of both variable and fixed cost elements. To have data available for planning, management wants to determine how much of the overhead cost varies with the number of units produced versus how much is fixed per month.

Required:

For both March and June, estimate the amount of manufacturing overhead cost added to production.


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