Benson Manufacturing Company produced 3,000 units of inventory in January Year 2. It expects to produce an additional 9,800 units during the remaining 11 months of the year. In other words, total production for Year 2 is estimated to be 12,800 units. Direct materials and direct labor costs are $71 and $53 per unit, respectively. Benson expects to incur the following manufacturing overhead costs during the Year 2 accounting period. Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities Required $ 5,800 182,000 135,000 33,000 332,200 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 3,000 units of product made in January.

Benson Manufacturing Company produced 3,000 units of inventory in January Year 2. It expects to produce an additional 9,800 units during the remaining 11 months of the year. In other words, total production for Year 2 is estimated to be 12,800 units. Direct materials and direct labor costs are $71 and $53 per unit, respectively. Benson expects to incur the following manufacturing overhead costs during the Year 2 accounting period. Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities Required $ 5,800 182,000 135,000 33,000 332,200 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 3,000 units of product made in January.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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