lew History Bookmarks Window Help Exercise 4-4A Pooling overhead cost LO 4-2 Ada

Question

lew History Bookmarks Window Help Exercise 4-4A Pooling overhead cost LO 4-2 Adams Manufacturing Company produced 2,900 units of inventory in January 2018. It expects to produce an additional 10,000 units during the remaining 11 months of the year. In other words, total production for 2018 is estimated to be 12,900 units. Direct materials and direct labor costs are $70 and $68 per unit, respectively. Adams expects to incur the following manufacturing overhead costs during the 2018 accounting period Production suppliea Supervisor salary Depreciation on equipment vriiities Rental fee on manufacturing facilities 5.400 175,000 127,000 21,000 Required a. Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units. b. Determine the cost of the 2.900 units of product made in January Complete this question by entering your answers in the tabs below Required A Required 8 Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver of units. Round vour answer to 2 decimal elaces.)

Explanation / Answer

a.

Calculation of predetermined rate Production supplies 5400 supervisor salary 175000 depreciation 127000 utilities 21000 rental fee 310150 Total 638550 Predetermined overhead rate = Total manufacturing overhead cost / total units (year) =638550/12900 =49.50 b. calculation of cost of units produced in jan Indirect overhead cost 49.5x2900 143550 Direct material 70x2900 203000 Direct labor 68x2900 197200 Total 543750

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