Question

Mickey Mouse Corporation’s plantwide overhead rate is $66 per hour. Factory workers (direct labor) are paid $48 per hour. Compute the total cost for completing Job No. 101. Job 101 was an order for 100 Widgets. Compute the cost per Widget.

a. Direct labor for Job 101…………….$1,800

b. Direct materials for Job 101………$5,420

Answer 1

Direct Labor Cost= $ 1,800

Direct Labor rate per hour = $ 48 per hour

Hence, direct labor hours = Direct Labor / Direct Labor rate per hour

= $ 1,800 / $ 48

= 37.50 hours

Overhead = Direct labor hours * plant wide overhead rate

= 37.50 Hours * $ 66

= $ 2,475

Total Cost = Direct labor + Direct materials+ Overhead

= $ 1,800 + $ 5,420 + $ 2,475

= $ 9,695

Cost per Widget = Total Cost / Total Widgets

= $ 9,695 / 100 Widgets

= $ 95.95

Hence the correct answer is $ 95.95