Question

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 94,000 Total fixed manufacturing overhead cost $ 404,200 Variable manufacturing overhead per direct labor-hour $ 4.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 50 Total direct labor-hours 100 Direct materials $ 660 Direct labor cost $ 9,400 The unit product cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice $217.80 $415.00 $117.80 $108.90

Answer 1

Predetermined overhead rate = [ Total fixed manufacturing overhead costs / Total direct labor hours ] + Variable manufacturing overhead rate per direct labor hour = [ $404,200 / 94,000 hours ] + $4 = $4.3 + $4 = $8.3 per direct labor hour

Calculation of unit product cost for Job P951 :

Direct materials	$660
(+) Direct labor cost	$9,400
(+) Manufacturing overhead [ Total direct labor hours used by Job P951 * Predetermined overhead rate = 100 hours * $8.3 ]	$830
Product cost	$10,890
( / ) Number of units in Job P951	50
Unit product cost	$217.80

So, the answer is $217.80