Question

Sneffy Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct labor hours were estimated at $100,000 and 25,000 hours, respectively, for the year. In July, Job #334 was completed at a cost of $5,000 in direct materials and $2,500 in direct labor. The labor rate is $5 per hour. By the end of the year, Sneffy had worked a total of 45,000 direct labor-hours and had incurred $110,250 actual manufacturing overhead cost.

If Job #334 contained 200 units, what was the unit product cost on the completed job cost sheet?

Answer 1

Direct Labour Cost for Job No. 334 ($)	2500
Labour Hour Rate	5
Direct Labour Hours worked	500
Total Estimated Manufactuing Cost incurred	100000
Total Estimated Direct Labour Hours	25000
Manufacturing Overhead Rate per hour	4
Direct Labour Hours worked for Job No. 334	500
Manufacturing Overhead for Job No. 334	2000

	Amt in $
Direct Material	5000
Direct Labour Cost for Job No. 334 ($)	2500
Manufacturing Overhead for Job No. 334	2000
Total Cost for 200 Units	9500
Cost per Unit	47.50