Question

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:

  

Direct materials	$230
Direct labor	$108

  

Required:

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

           

2.	If Job A-500 consists of 40 units, what is the average cost assigned to each unit included in the job? (Round your answer to 2 decimal places.)

     

Answer 1

Total hours for job A - 500 = Direct labor/ direct labor wage rate = 108/12 = 9 hrs

Total over head cost = overhead cost per labor hours * no. of labor hours = 14 * 9 = $ 126

total manufacturing cost = Direct materials cost + Direct labor cost + Total over head cost = 230 + 108 + 126 = $464

Cost assigned to each unit = total manufacturing cost/ number of units = 464/40 = $11.6

Answer 2

Mickley Company’s plantwide predetermined overhead rate is $23.00 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	$ 270
Direct labor	$ 195

 

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? (Round your answer to 2 decimal places.)

 

Answers:

1. Total manufacturing cost= $810.00

2. Cost assigned to each unit= 810/50 = $16.20