Ware Manufacturing Company produced 2,000 units of inventory in January 2018. It

Question

Ware Manufacturing Company produced 2,000 units of inventory in January 2018. It expects to produce an additional 14,000 units during the remaining 11 months of the year. In other words, total production for 2018 is estimated to be 16,000 units. Direct materials and direct labor costs are $64 and $52 per unit, respectively. Ware expects to incur the following manufacturing overhead costs during the 2018 accounting period: Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities $ 20,000 160,000 75,000 20,000 45,000 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 2,000 units of product made in January Complete this question by entering your answers in the tabs below. Required ARequired B Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units Predetermined overhead rate per unit

Explanation / Answer

a Total manufacturing overhead = 20000+160000+75000+20000+45000= 320000 Predetermined overhead rate = 320000/16000 = $20 b January Direct materials 128000 =2000*64 Direct labor 104000 =2000*52 Overhead 40000 =2000*20 Total 272000

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