Question

Cabigas Company manufactures two products, Product C and Product D. The company estimated it would incur $175,900 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period's operations appear below: Product C Product D Estimated volume 2,000 units 2,700 units Direct labor-hours per unit 3.50 hours 1.40 hour Direct materials cost per unit $ 23.00 $ 25.60 Direct labor cost per unit $ 30.00 $ 10.80 Requried: a-1. Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.) Predetermined overhead rate $ 74.85 per DLH a-2. Determine the unit product cost of each product for the current year. (Do not round your intermediate calculations. Round your final answer to 2 decimal places.) Product C Product D Unit product cost $ $

Answer 1

	Product -C	Product - D	Total
Units	2000	2700
Labor hours	3.5	1.4
Total Hours = Units * Labor per hour	7000	3780	10780

Predetermined Overhead = Total estimated overhead / Total DLH

= 175900 / 10780

= 16.32 ...... Final answer

Question - 2

	Product -C	Product - D
Direct material cost per unit	23	25.6
Direct labor cost per unit	30	10.8
Factory Overhead
Product - C …. 3.5 Hours * 16.32	57.12
Product - D …. 1.4 Hours * 16.32		22.848
Unit Product cost                           $	110.12	59.25