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Calculating the overhead and determining the cost of products

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3-33. The following information relates to the Richard Renick Company for 2005:
Units Percent Complete
Units completed in 2005 390,000
Work-in-process at December 31 72,000 20%
Cost information:
Cost of the beginning work-in-process $14,280
Current year's production cost $248,580

a. Calculate the number of equivalent units of production.
b. Calculate the cost per equivalent unit of production.
c. Calculate the cost of the ending work-in-process inventory.
d. Calculate the cost of the completed units.

3-13, pg M-85
Willig-Davis Cleaning Equipment began two jobs during March 2004. There was no beginning Inventory. The following information is available:

Job 10 Job 15
Direct material $14,350 $23,530
Direct labor $7,231 $15,125
Machine hours 124 236

The company estimated manufacturing overhead for 2004 is $307,200, and the company estimates that 4,800 machine hours will be used during the year. Willig-Davis applies overhead to production based on machine hours.

a. Calculate the cost of Job 10.
b. Calculate the cost of Job 15.

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Solution Summary

The solution calculates the overhead and determines the cost of products.

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Determine/Calculate Impact on Profit

Zaccagnino Corporation makes a range of products. The company's predetermined overhead rate is $14 per direct labor-hour, which was calculated using the following budgeted data:
Variable manufacturing overhead........$105,000
Fixed manufacturing overhead............$385,000
Direct labor-hours................................ 35,000

Management is considering a special order for 300 units of product D03C at $119 each. The normal selling price of product D03C is $157 and the unit product cost is determined as follows:
Direct material......................$64.00
Direct labor............................37.50
Manufact overhead applied....35.00
Unit product cost................ $136.50

If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order.
Required: If the special order were accepted, what would be the impact on the company's overall profit?

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