Thornton Manufacturing Company produced 2,000 units of inventory in January 2018. It expects to produce an additional 10,000 units during the remaining 11 months of the year. In other words, total production for 2018 is estimated to be 12,000 units. Direct materials and direct labor costs are $75 and $54 per unit, respectively. Thornton expects to incur the following manufacturing overhead costs during the 2018 accounting period: $ 6,200 181,000 142,000 32,000 247,800 Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities Required 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 2,000 units of product made in January.

Thornton Manufacturing Company produced 2,000 units of inventory in January 2018. It expects to produce an additional 10,000 units during the remaining 11 months of the year. In other words, total production for 2018 is estimated to be 12,000 units. Direct materials and direct labor costs are $75 and $54 per unit, respectively. Thornton expects to incur the following manufacturing overhead costs during the 2018 accounting period: $ 6,200 181,000 142,000 32,000 247,800 Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities Required 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 2,000 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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