Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stuart Corporation estimated its overhead costs would be $22,600 per month except for January when it pays the $151,200 annual insurance premium on the manufacturing

Stuart Corporation estimated its overhead costs would be $22,600 per month except for January when it pays the $151,200 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $173,800 ($151,200 + $22,600). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,500 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The companys actual direct labor hours were the same as the estimated hours. The company made 3,750 units of product in each month except July, August, and September, in which it produced 4,750 units each month. Direct labor costs were $23.50 per unit, and direct materials costs were $10.90 per unit.

A. Calculate a predetermined overhead rate based on direct labor hours.

B. Determine the total allocated overhead cost for January, March, and August.

C. Determine the cost per unit of product for January, March, and August.

D. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $21.50 per unit.

FOR B through D Below:
January March August
Total allocated overhead cost
Cost per unit
Price

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

why we face Listening Challenges?

Answered: 1 week ago

Question

what is Listening in Context?

Answered: 1 week ago