Question

Mickley Company's plantwide predetermined overhead rate is $18.00 per direct labor-hour and its direct labor wage rate is $14.00 per hour. The following information pertains to Job A-500: 

Direct materials $ 270 

 Direct labor $ 70 

Required:

 1. What is the total manufacturing cost assigned to Job A-500?

 2. If Job A-500 consists of 30 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.)

Answer 1

Requirement (1)

Number of labor hours = Direct labor cost / Direct wage rate = $70 / $14 = 5

Manufacturing overhead = Pre-determined overhead rate x Number of labor hours = $18 x 5 = $90

Total manufacturing cost = Direct material + Direct labor + Manufacturing overhead cost

= $(270 + 70 + 90)

= $430

.

Requirement (2)

Unit Product Cost = Total manufacturing cost / Number of units

= $430 / 30

= $14.33 per unit

.

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