Question

Exercise 2-3 Computing Total Job Costs and Unit Product Costs Using a Plantwide Predetermined Overhead Rate [LO2-3] Mickley Company's plantwide predetermined overhead rate is $19.00 per direct labor-hour and its direct labor wage rate is $14.00 per hour. The following information pertains to Job A-500: $ 240 $140 Direct materials Direct labor Required: 1. What is the total manufacturing cost assigned 2. If Job A-500 consists of 60 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.) Job A-500? Total manufacturing cost 1. per unit 2. Unit product cost

Answer 1

1)

Direct labor is given as $140 and per hour cost of direct labor is $14

So, number of hours used of direct labor

= Total cost of labor / Cost per hour

= $140 / $14

= 10 hours

So, cost of overhead assigned to Job

= Number of hours x Overhead per hour

= 10 x $19

= $190

So, Total cost of the Job

= Direct material + Direct labor + Overhead

= $240 + $140 + $190

= $570

2)

Unit product cost

= Total cost / Number of units

= $570 / 60

= $9.50 per unit