Rooney Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $146,100 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $169,700 ($146,100 + $23,600). The company expected to use 7,400 direct labor hours per month except during July, August, and September when the company expected 9,600 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 3,700 units of product in each month except July, August, and September, in which it produced 4,800 units each month. Direct labor costs were $24.90 per unit, and direct materials costs were $10.70 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 $20.20 per unit.
Rooney Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $146,100 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $169,700 ($146,100 + $23,600). The company expected to use 7,400 direct labor hours per month except during July, August, and September when the company expected 9,600 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 3,700 units of product in each month except July, August, and September, in which it produced 4,800 units each month. Direct labor costs were $24.90 per unit, and direct materials costs were $10.70 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 $20.20 per unit.
Chapter10: Short-term Decision Making
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![Rooney Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $146,100 annual
insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $169,700 ($146,100 +
$23,600). The company expected to use 7,400 direct labor hours per month except during July, August, and September when the
company expected 9,600 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 3,700 units of
product in each month except July, August, and September, in which it produced 4,800 units each month. Direct labor costs were
$24.90 per unit, and direct materials costs were $10.70 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 $20.20 per unit.
Complete this question by entering your answers in the tabs below.
Req A
Reg B to D
Datermina the tatal alleeated ouiarhend coct
the ceet nor unit af nraduet and the collina mriee far the nraduet for lan An](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e717a7a-d3eb-4a12-a1c5-3a48e64b4e0c%2F7010e2a9-8d27-4bfa-be79-b61fb7203efc%2Fw0cwlev_processed.png&w=3840&q=75)
Transcribed Image Text:Rooney Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $146,100 annual
insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $169,700 ($146,100 +
$23,600). The company expected to use 7,400 direct labor hours per month except during July, August, and September when the
company expected 9,600 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 3,700 units of
product in each month except July, August, and September, in which it produced 4,800 units each month. Direct labor costs were
$24.90 per unit, and direct materials costs were $10.70 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 $20.20 per unit.
Complete this question by entering your answers in the tabs below.
Req A
Reg B to D
Datermina the tatal alleeated ouiarhend coct
the ceet nor unit af nraduet and the collina mriee far the nraduet for lan An
![Req A
Req B to D
Determine the total allocated overhead cost, the cost per unit of product and the selling price for the product for January,
March, and August. Assume that the company desires to earn a gross margin of $20.20 per unit. (Do not round intermediate
calculations. Round "Cost per unit" and "Selling price per unit" to 2 decimal places. Round your total allocated overhead cost
to nearest whole dollar.)
Show less A
January
March
August
Total allocated overhead cost
Cost per unit
Selling price per unit
< Req A
Req B to D >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e717a7a-d3eb-4a12-a1c5-3a48e64b4e0c%2F7010e2a9-8d27-4bfa-be79-b61fb7203efc%2Fai2eu8_processed.png&w=3840&q=75)
Transcribed Image Text:Req A
Req B to D
Determine the total allocated overhead cost, the cost per unit of product and the selling price for the product for January,
March, and August. Assume that the company desires to earn a gross margin of $20.20 per unit. (Do not round intermediate
calculations. Round "Cost per unit" and "Selling price per unit" to 2 decimal places. Round your total allocated overhead cost
to nearest whole dollar.)
Show less A
January
March
August
Total allocated overhead cost
Cost per unit
Selling price per unit
< Req A
Req B to D >
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