Exercise $4-3$A $($Algo$)$ Allocating overhead cost to accomplish smoothing LO $4-2$

Fanning Corporation expects to incur indirect overhead costs of $$147,825$ per month and direct manufacturing costs of $$21$ per unit. The expected production activity for the first four months of the year are as follows.

$\backslash$table$[[,$January,February,March,April$],[$Estimated production in units,$4,000,7,200,3,100,7,600]]$

Required

a$.$ Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four mor of the year.

b$.$ Allocate overhead costs to each month using the overhead rate computed in Requirement $a.$

c$.$ Calculate the total cost per unit for each month using the overhead allocated in Requirement $b.$

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