Summit Corporation manufactures machines for the apparel industry. The production manager and cost analyst reviewed the accounts for the previous quarter and have provided an estimated breakdown of the fixed and variable portions of manufacturing overhead: Administration and supervision Engineering and indirect labor Indirect supplies Facilities cost Repair and maintenance Total Fixed $ 34,450 7,700 11,600 137,000 61,900 $ 252,650 Variable $ 13,500 60,900 28,600 15,400 80,000 $ 198,400 Total $ 47,950 68,600 40,200 152,400 141,900 $ 451,050 Direct materials for the quarter amounted to $371,500. Direct labor for the quarter was $732,500. During the quarter, 9,500 units were produced. Required: a. No changes are expected in these cost relations next quarter. The firm has budgeted production of 12,350 units. Provide an estimate for total production cost for next quarter. b. Determine the cost per unit of production for the previous quarter and the estimated cost per unit next quarter.

Summit Corporation manufactures machines for the apparel industry. The production manager and cost analyst reviewed the accounts for the previous quarter and have provided an estimated breakdown of the fixed and variable portions of manufacturing overhead: Administration and supervision Engineering and indirect labor Indirect supplies Facilities cost Repair and maintenance Total Fixed $ 34,450 7,700 11,600 137,000 61,900 $ 252,650 Variable $ 13,500 60,900 28,600 15,400 80,000 $ 198,400 Total $ 47,950 68,600 40,200 152,400 141,900 $ 451,050 Direct materials for the quarter amounted to $371,500. Direct labor for the quarter was $732,500. During the quarter, 9,500 units were produced. Required: a. No changes are expected in these cost relations next quarter. The firm has budgeted production of 12,350 units. Provide an estimate for total production cost for next quarter. b. Determine the cost per unit of production for the previous quarter and the estimated cost per unit next quarter.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Summit Corporation manufactures machines for the apparel industry. The production manager and cost analyst reviewed the accounts
for the previous quarter and have provided an estimated breakdown of the fixed and variable portions of manufacturing overhead:
Administration and supervision
Engineering and indirect labor
Indirect supplies
Facilities cost
Repair and maintenance
Total
Fixed
$ 34,450
7,700
11,600
137,000
61,900
$ 252,650
Variable
$ 13,500
60,900
28,600
15,400
80,000
$198,400
Total
$ 47,950
68,600
40, 200
152,400
141,900
$ 451,050
Direct materials for the quarter amounted to $371,500. Direct labor for the quarter was $732,500. During the quarter, 9,500 units were
produced.
Required:
a. No changes are expected in these cost relations next quarter. The firm has budgeted production of 12,350 units. Provide an
estimate for total production cost for next quarter.
b. Determine the cost per unit of production for the previous quarter and the estimated cost per unit next quarter.

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