Question

Mickley Company’s plantwide predetermined overhead rate is $23.00 per direct labor-hour and its direct labor wage rate is $16.00 per hour. The following information pertains to Job A-500:

Direct materials	$	220
Direct labor	$	320

Required:

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

2. If Job A-500 consists of 50 units, what is the unit product cost for this job?

	1. Total manufacturing cost 2. Unit product cost    per unit

Answer 1

1.

Total direct labor hour = Total direct labor cost / Direct labor wage rate

= $320 / $16

= 20 direct labor hours

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

Manufacturing overhead applied = 20 dlh * Predetermined overhead rate

= 20 * $23

= $460

Total manufacturing costs = $220 + $320 + $460

= $1,000

2.

Unit product cost = Total manufacturing cost / Units

= $1,000 / 50 units

= $20.00