Farrow co. expects to sell 150,000 units of its product in the next period with the following results. sales (150,000 units)$2,250,000 costs and expenses direct materials 300,000 direct labor 600,000 overhead 150,000 selling expenses 225,000 administrative expenses 385,500 total costs and expenses 1,660,500 net income$589,500 the company has an opportunity to sell 15,000 additional units at $12 per unit. the additional sales would not affect its current expected sales. direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. however, the additional volume would create the following incremental costs: (1) total overhead would increase by 15% and (2) administrative expenses would increase by $64,500. calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit.

Speedy auto repairs uses a job-order costing system. the company’s direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics’ hourly wages. speedy’s overhead costs include various items, such as the shop manager’s salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. the company applies all of its overhead costs to jobs based on direct labor-hours. at the beginning of the year, it made the following estimates: direct labor-hours required to support estimated output 20,000 fixed overhead cost $ 350,000 variable overhead cost per direct labor-hour $ 1.00 required: 1. compute the predetermined overhead rate. 2. during the year, mr. wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. the following information was available with respect to his job: direct materials $ 590 direct labor cost $ 109 direct labor-hours used 6