Question

Mickley Company's plantwide predetermined overhead rate is $18.00 per direct labor-hour and its direct labor wage rate is $13.00 per hour. The following information pertains to Job A-500: Direct materials Direct labor $ 260 $ 195 Required: 1. What is the total manufacturing cost assigned to Job A-500? 2. If Job A-500 consists of 60 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.) 1. Total manufacturing cost 2. Unit product cost por unit

Answer 1

Answer:

1.	Total manufacturing cost	$725
2.	Unit product cost	$12.08	per unit

Explanation:

Actual direct labor hours = Actual direct labor cost / Direct labor hour per hour.

= $195 / $13 per hr. = 15 direct labor hours.

Manufacturing overhead applied = Actual direct labor hours * Predetermined overhead rate

= 15 direct labor hours * $18 = $270

Total manufacturing cost = Direct material cost + Direct labor cost + Manufacturing overhead applied

= $260 + $195 + $270 = $725.

Unit product cost = Total manufacturing cost / Number of units

= $725 / 60 units = $12.08