Question

Thornton Corporation expects to incur indirect overhead costs of $171,825 per month and direct manufacturing costs of $12 per unit. The expected production activity for the first four months of the year are as follows. January February March 4,500 7,200 4,500 April 7,500 Estimated production in units Required a. Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. b. Allocate overhead costs to each month using the overhead rate computed in Requirement a. c. Calculate the total cost per unit for each month using the overhead allocated in Requirement b. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the total cost per unit for each month using the overhead allocated in Requirement b. January 4,500 February 7,200 March 4 ,500 April 7,500 Month Number of units Expected cost Overhead Direct costs Total cost Cost per unit 1 $ P $ 1 $ 29 $ 12 41 s 41 $ 29 $ 12 41 s 29,520 $ 29 $ 12 41 $ 184,500 $ 29 12 41 307,500

Answer 1

Solution - a I I) Total estimated production Cinunits) = 4500 unit + 7200 unit + 4500 unitt prodo r 7500 unit = 23,700 yit warto I) Total overhead Cost for the first four month = $171825 4 month on = $ 687,300 Pedetermined overhead Rate Total overhead Cost (wix Total Production unit $687,300 th $29 Perunit 23,700 unit - on 19 w c owocow - Bovito R . V

solution (6) Allocation of overhead, Costs to each month using Be-determined overhead pate Particulat Production (im units) overhead Cost B Per unit January | Feb. I march 1 April | 4500 17200 14500 17500 $29 | $29 1$29 -$29 - © co Allocated ($) 130,500 208,800 |130,500 217,500 overhead Cost CAXB) solution.ch Calculation of total Cost per unit for each month Particular Jan. I Feb. march April No. of units 4500 17200 14500 17500 Expected Cost! | - Overhead T130500 208,800 130500 217.500 → mfg. Cost 54000 86400 54000 90000 Expected total 1 184500 4295200 (184500 /307500 Cost (ETC) $u Gst per unit ETC No of unit $41 $41 $11