Question

Mickley Company's predetermined overhead rate is $23.00 per direct labor-hour and its direct labor wage rate is $15.00 per hour. The following information pertains to Job A-500: Direct materials Direct labor $220 $150 Required: 1. What is the total manufacturing cost assigned to Job A-500? Total manufacturing cost 2. If Job A-500 consists of 60 units, what is the average cost assigned to each unit included in the job? (Round your answer to 2 decimal places.) Average cost per unit

Answer 1

Total labor hours=(150/15)=10 hours

Hence total overhead=($23*10 hours)=$230

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

=(220+150+230)=$600

Average cost=($600/60 units)

=$10 per unit