Chapter 10, Problem 9E

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Assume that 800 units were worked on during a period in which a total of 700 good units were completed. Normal spoilage consisted of 50 units; abnormal spoilage, 40 units. Total production costs were $3,600. The company accounts for abnormal spoilage separately on the income statement as a loss due to abnormal spoilage. Normal spoilage is not accounted for separately. What is the cost of the good units produced?

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Thurman Industries forecasts that total overhead for the current year will be $13,250,000 with 175,000 total machine hours. Year to date, the actual overhead is $8,420,000 and the actual machine hours are 89,000 hours. The predetermined overhead rate based on machine hours is _. (Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.)