Question
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
-
Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units.
-
Determine the cost of the 2,500 units of product made in January.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started