Question

1)

Mickley Company's plantwide predetermined overhead rate is $20.00 per direct labor-hour and its direct labor wage rate is $12.00 per hour. The following information pertains to Job A-500: Direct materials Direct labor $ 220 $ 120 Required: 1. What is the total manufacturing cost assigned to Job A 500? 2. If Job A 500 consists of 80 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.) 1. Total manufacturing cost 2. Unit product cost per unit

2)

3)

Answer 1

Solution 1)

1. Total manufacturing Cost -$540

2. Unit product Cost - $6.75 per unit

Working Calculation of Total Manufacturing Cost Direct material Direct Labor Manufacturing Overhead* Total Manufacturing Cost $220 $120 $200 $540 Calcualtion of manufacturing overhead Total Direct labor cost $120 Direct Labor rate $12 per hour Direct Labor hours (A) 10 Hrs predetermined overhead rate Manufacturing overhead (B) $20 per DLH (A*B) $200 Calculation of Unit Product Cost Total Manufacturing Cost (A) Total Units (B) Unit Product Cost (A/B) $540 80 $6.75

Solution 2.

Predetermined Overhead rate = (Fixed Manufacturing Overhead /Budgeted Labor Hours) + Variable Mfg Overhead Rate

= ($1,043,200 / 64,000 hours) + $8.30

=$16.3 + $8.30

=$24.60

Solution 3.

Overhead Applied = $880

Working:

Calculation of Overhead rate for Machining department As given, Machining department's overhead rate is based on machine hours. Total Overhead rate = (Total Fixed overhead / Total Machine hours) + Variable manufacuring overhead per MH = ($50,400 / 12,000 MH) + $3 per MH = $4.2 per MH + $3 per MH = $7.2 per MH Calculation of Overhead rate for Customizing department As given, customizing department's overhead rate is based on direct labor hours. Total Overhead rate = (Total Fixed overhead/Total direct labor hours) + Variable manufacuring overhead per DLH = ($83,600 / 19,000 MH) + $6 per DLH = $4.4 per DLH + $6 per DLH = $10.4 per DLH Calculation of Total overhead Total overhead = (MH used in Machining department * Overhead rate)+(DLH used in Customize department*Overhead rate) (50 Hours*$7.2)+(50 Hours* $10.4) $360 + $520 880 (Overhead Applied)