Exercise $13-15($Algo$)$ Product costing$-$various issues LO $13-5$

Ironstone Incorporated produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an

application rate based on direct labor hours.

Required:

a$.$ For $2022,$ the company's cost accountant estimated that total overhead costs incurred would be $$676,700$ and that a total of

$67,000$ direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a

production run.

Note: Round your answer to $2$ decimal places.

b$.$ A production run of $340$ coffee mugs used raw materials that cost $$590$ and used $40$ direct labor hours at a cost of $$11\mathrm{.}70$ per hour.

Calculate the cost of each coffee mug produced.

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

c$.$ At the end of August $2022,270$ coffee mugs made in the production run in part b had been sold and the rest were in ending

inventory. Calculate $(1)$ the cost of the coffee mugs sold that would have been reported in the income statement and $(2)$ the cost

included in the August $31,2022,$ finished goods inventory.

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.