Gibson Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $135,240 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $158,840 ($135,240. $23,600). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,200 hours of direct labor each month to build inventories for high demand that normally occurs during the i Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,750 units of product in each month except July, August, and September, in which it produced 4,600 units each month. Direct labor costs were $23.40 per unit, and direct materials costs were $11.40 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 $20.40 per unit. Complete this question by entering your answers in the tabs below. Reg A Req B to D Calculate a predetermined overhead rate based on direct labor hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per labor hour Req B to D >
Gibson Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $135,240 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $158,840 ($135,240. $23,600). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,200 hours of direct labor each month to build inventories for high demand that normally occurs during the i Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,750 units of product in each month except July, August, and September, in which it produced 4,600 units each month. Direct labor costs were $23.40 per unit, and direct materials costs were $11.40 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 $20.40 per unit. Complete this question by entering your answers in the tabs below. Reg A Req B to D Calculate a predetermined overhead rate based on direct labor hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per labor hour Req B to D >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Reg A
Reg 8 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 $20.40 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 cont
to nearest whole dollar)
Total allocated overhead cost
Cost per unit
Selling price per unit
January
RA
August
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Transcribed Image Text:Gibson Corporation estimated its overhead costs would be $23,600 per month except for January when it pays the $135,240 annual
insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $158,840 ($135,240+
$23,600). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the
company expected 9,200 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 3,750 units of
product in each month except July, August, and September, in which it produced 4,600 units each month. Direct labor costs were
$23.40 per unit, and direct materials costs were $11.40 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 $20.40 per unit.
Complete this question by entering your answers in the tabs below.
Req B to D
Calculate a predetermined overhead rate based on direct labor hours. (Round your answer to 2 decimal places.)
Predetermined overhead rate
per labor hour
Req A
Toad
REST
2007
TROLLS
#love
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Req B to D >
A
PO
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