Question

Mickley Company’s plantwide predetermined overhead rate is $20.00 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	$	240
Direct labor	$	150

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 unit product cost for this job? (Round your answer to 2 decimal places.)

Answer 1

1)	Total manufacturing cost assigned to Job A-500	$ 590
Working:
Direct labor hours	=	Direct Labor cost	/	Wage rate per hour
	=	$ 150.00	/	$    15.00
	=	10
Manufacturing overhead	=	Direct Labor hours	*	Overhead rate per hour
	=	10	*	$    20.00
	=	$        200
Direct materials		$        240
Direct Labor		$        150
Manufacturing overhead		$        200
Total Manufacturing cost		$        590
2)	Unit product cost is $ 14.75
Working:
Unit product cost	=	Total Manufacturing cost	/	Total Units
	=	$        590	/	40
	=	$    14.75