Lemiley Manufacturing Company produced 1,200 units of inventory in January 2009. It expects to produce an additional 8,400 units during the remaining 11 months of the year. In other words, total production for 2009 is estimated to be 9,600 units. Direct materials and direct labor costs are $64 and $52 per unit, respectively. Lemiley Company expects to incur the following manufacturing overhead costs during 2009.

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 1,200 units of product made in January.
c. Is the cost computed in Requirement b actual or estimated? Could Lemiley improve accuracy by waiting until December to determine the cost ofproducts?

Transcribed Image Text:

Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities S 4,800 192,000 144,000 36,000 96,000