Question

Question One (CLO3) (15 marks) (45 minutes) IA- Mickley Company's predetermined overhead rate is $14.00 per direct labor-hour and its direct labor wage rate is $12.00 per hour. The following information pertains to Job A-500: (4+2-6 marks) Direct materials .... $ 230 Direct labor ......... $108 Required: i. What is the total manufacturing cost assigned to Job A-500? (4 marks) ii. If Job A-500 consists of 40 units, what is the average cost assigned to each unit included in the job? (2 marks)

Answer 1

Total labor hours = 108/12 = 9 hours

1.) Total Manufacturing cost = direct material + direct labor + overhead

= 230 + 108 + (9 x $14) = $464

2.) Per unit cost = total cost/total units

= 464/40

= $11.60 per unit