Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Vernon Corporation estimated its overhead costs would be $22,400 per month except for January when it pays the $145,290 annual insurance premium on the

image text in transcribedimage text in transcribed

Vernon Corporation estimated its overhead costs would be $22,400 per month except for January when it pays the $145,290 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $167,690 ($145,290 + $22,400). The company expected to use 7,400 direct labor hours per month except during July, August, and September when the company expected 9,900 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,700 units of product in each month except July, August, and September, in which it produced 4,950 units each month. Direct labor costs were $24.70 per unit, and direct materials costs were $10.50 per unit. Required 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 $20.00 per unit. Complete this question by entering your answers in the tabs below. Req A Req B to D Determine the total allocated overhead cost, the cost per unit of product and the selling price for the product for January, March, and August. Assume that the company desires to earn a gross margin of $20.00 per unit. (Do not round intermediate calculations. Round "Cost per unit" and "Selling price per unit" to 2 decimal places. Round your total allocated overhead cost to nearest whole dollar.) Show less January March August Total allocated overhead cost Cost per unit Selling price per unit < Req A Req B to D >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso

11th Edition

111856667X, 978-1118566671

Students also viewed these Accounting questions

Question

Why do advocates of TQM expect to earn higher profits?

Answered: 1 week ago