Question

Fickel Company has two manufacturing departments—Assembly and Testing & Packaging. The predetermined overhead rates in Assembly and Testing & Packaging are $28.00 per direct labor-hour and $24.00 per direct labor-hour, respectively. The company’s direct labor wage rate is $30.00 per hour. The following information pertains to Job N-60:

	Assembly				Testing & Packaging
Direct materials	$	420			$	57
Direct labor	$	375			$	105

Required:

1. What is the total manufacturing cost assigned to Job N-60? (Do not round intermediate calculations.)

2. If Job N-60 consists of 10 units, what is the unit product cost for this job? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

Requirement (1)-The total manufacturing cost assigned to Job N-60

Overhead allocated to Assembly = [Direct labor cost / Labor rate] x predetermined overhead rates

= [$375 / $30 per hour] x $28.00 per hour

= 12.50 Labor hours x $28.00 per hour

= $350

Overhead allocated to Testing & Packaging = [Direct labor cost / Labor rate] x predetermined overhead rates

= [$105 / $30 per hour] x $24.00 per hour

= 3.50 Labor hours x $24.00 per hour

= $84

Total overhead costs = Overhead allocated to Assembly + Overhead allocated to Testing & Packaging

= $350 + $84

= $434

Therefore, the total manufacturing cost assigned to Job N-60 = Total Material costs + Total labor costs + Total overhead costs

= [$420 + $57] + [$375 + $105] + $434

= $477 + $480 + $434

= $1,391

Requirement (2) – The unit product cost for this job

The unit product cost for this job = The total manufacturing cost / Number of units

= $1,391 / 10 Units

= $139.10 per unit