2. 5.5
points
Pundle Corporation estimated its overhead costs would be $22,600 per
month except for January when it pays the $129,480 annual insurance
premium on the manufacturing facility. Accordingly, the January overhead
costs were expected to be $152.080 ($129.480 + $22,600) The company
expected to use 7.500 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 3.750 units of
product in each month except July, August, and September, in which it
produced 4,650 units each month. Direct labor costs were $23.00 per unit.
and direct materials costs were $10.60 per unit.
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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 $20.60 per unit