Jordan Corporation estimated its overhead costs would be $23.200 per month excep
ID: 2337895 • Letter: J
Question
Jordan Corporation estimated its overhead costs would be $23.200 per month except for January when it pays the $12200 annua insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $135.400 ($112 23,200) The company expected to use company expected 9,400 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 3,600 units of 7.200 direct labor hours per month except during July, August, and September when the product in each month except July, August, and September, in which it produced 4700 units each month. Direct labor costs $24.70 per unit, and direct materials costs were $10.40 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 $20.90 per unit. Complete this question by entering your answers in the tabs below. Req A Reqs B to D Calculate a predetermined overhead rate based on direct labor hours. (Round your answer to 2 decimal places.) rate per labor hour Reqs B to D >Explanation / Answer
1-
overhead rate based on direct labor hours
390600/93000
4.2
total no of labor hours
(7200*9)+(9400*3)
93000
total overhead
(23200*12)+(112200)
390600
total allocated overhead cost
2-
Month
January
March
August
labor hours
7200
7200
9400
overhead rate based on direct labor hours
4.2
4.2
4.2
total allocated overhead cost = labor hours*overhead cost per labor hours
30240
30240
39480
3-
cost per unit
Month
January
March
August
Raw material per unit
10.4
10.4
10.4
direct labor
24.7
24.7
24.7
overhead cost per unit = total overhead/no of units produced
8.4
8.4
8.4
cost per unit
43.5
43.5
43.5
4-
Selling price per unit
cost per unit + gross margin
43.5+20.90
64.4
1-
overhead rate based on direct labor hours
390600/93000
4.2
total no of labor hours
(7200*9)+(9400*3)
93000
total overhead
(23200*12)+(112200)
390600
total allocated overhead cost
2-
Month
January
March
August
labor hours
7200
7200
9400
overhead rate based on direct labor hours
4.2
4.2
4.2
total allocated overhead cost = labor hours*overhead cost per labor hours
30240
30240
39480
3-
cost per unit
Month
January
March
August
Raw material per unit
10.4
10.4
10.4
direct labor
24.7
24.7
24.7
overhead cost per unit = total overhead/no of units produced
8.4
8.4
8.4
cost per unit
43.5
43.5
43.5
4-
Selling price per unit
cost per unit + gross margin
43.5+20.90
64.4
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