Question

Mickley Company’s plantwide predetermined overhead rate is $22.00 per direct labor-hour and its direct labor wage rate is $12.00 per hour. The following information pertains to Job A-500:

Direct Materials	$280
Direct Labor	$240

Required:

1. What is the total manufacturing cost assigned to Job A-500?

2. If Job A-500 consists of 70 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.)

Answer 1

1. Manufacturing cost assigned to job A

= predetermined overhead rate * labor hours

= $22 * 20 labor hours ($240 / $12 per labor hour)

= $440

2. Unit product cost

Direct Material $280

Direct Lbor $240

Manufacturing aoverhead $440

Total product cost $960

Divided by units 70 units

Unit product Cost $13.71