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Zachary Manufacturing Company produced 2,500 units of inventory in January 2018. It expects to produce an additional 10,300 units during the remaining 11 months of

Zachary Manufacturing Company produced 2,500 units of inventory in January 2018. It expects to produce an additional 10,300 units during the remaining 11 months of the year. In other words, total production for 2018 is estimated to be 12,800 units. Direct materials and direct labor costs are $79 and $56 per unit, respectively. Zachary expects to incur the following manufacturing overhead costs during the 2018 accounting period:

Production supplies $ 6,700
Supervisor salary 185,000
Depreciation on equipment 130,000
Utilities 35,000
Rental fee on manufacturing facilities 292,900

Required

  1. Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units.

  2. Determine the cost of the 2,500 units of product made in January.

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