Question

Check my w Problem 12-18A (Algo) Allocation to accomplish smoothing LO 12-1, 12-2, 12-3 Campbell Corporation estimated its overhead costs would be $22,900 per month except for January when it pays the $108,960 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $131,860 ($108,960 + $ 22,900). The company expected to use 7,300 direct labor hours per month except during July, August, and September when the company expected 9,300 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 3,650 units of product in each month except July, August, and September, in which it produced 4,650 units each month. Direct labor costs were $24.50 per unit, and direct materials costs were $11.10 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 $2160 per unlt. Complete this question by entering your answers in the tabs below. < Prev 3 of 3 Next MacBook DU DD 14 s 18

Answer 1

Req A	predetermined overhead rate
	Estimated overhead cost			(22900*12+108960)=			383760
	Estimated direct labor hrs			(7300*9+9300*3)=			93600
	predetermined overhead rate						4.1	per labor hr
Req B to D				January	March	August
	Total allocated overhead cost			29930	29930	38130
	cost per unit			43.8	43.8	43.8
	Selling price per unit			65.4	65.4	65.4
	Working
	cost per unit
	direct materials per unit			11.1	11.1	11.1
	direct labor per unit			24.5	24.5	24.5
	overhead per unit			8.2	8.2	8.2
	cost per unit			43.8	43.8	43.8