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Question - Tamra Corp. makes one product line. In February 2013, Tamra paid $530,000 in factory overhead costs. Of that amount, $124,000 was for January's factory utilities and $48,000 was for property taxes on the factory for the year 2013. February's factory utility bill arrived on March 12, 2013, and was only $81,000 because the weather was significantly milder than in January. Tamra Corp. produced 50,000 units of product in both January and February 2013.
a. What were Tamra's actual factory overhead costs for February 2013?
b. Actual per-unit direct material and direct labor costs for February 2013 were $24.30 and $10.95. What was actual total product cost for February?
c. Assume that, other than factory utilities, all direct material, direct labor, and over- head costs for Tamra Corp. were the same for January and February 2013. Will product cost for the two months differ? How can such differences be avoided?
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