Question

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Mickley Company's predetermined overhead rate is $24.00 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 Direct labor $280 $195 Required: 1. What is the total manufacturing cost assigned to Job A-500? Total manufacturing cost 2. If Job A-500 consists of 50 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

1	Total manufacturing cost:
					$
	Direct materials				280
	Direct labor				195
	Manufacturing overhead applied			(Note:1)	360
	Total manufacturing cost				835
	Note:1
	Manufacturing overhead applied=Predetermined overhead rate*Direct labor hours
	Direct labor hours=Direct labor cost/Direct labor wage rate=195/13=15
	Manufacturing overhead applied=24*15=$ 360
2	Average cost=Total manufacturing cost/Number of units=835/50=$ 16.70 per unit