Question

Fickel Company has two manufacturing departments—Assembly and Testing & Packaging. The predetermined overhead rates in Assembly and Testing & Packaging are $32.00 per direct labor-hour and $28.00 per direct labor-hour, respectively. The company’s direct labor wage rate is $34.00 per hour. The following information pertains to Job N-60:

	Assembly				Testing & Packaging
Direct materials	$	440			$	65
Direct labor	$	493			$	187

Required:

1. What is the total manufacturing cost assigned to Job N-60? (Do not round intermediate calculations.)

2. If Job N-60 consists of 10 units, what is the unit product cost for this job? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

Part-1:

Computation the total manufacturing cost is:

Total manufacturing cost = Total value of direct materials + Total value of direct labors + Total value of overhead

= $505 + $680 + $618

= $1,803

Hence, the total manufacturing cost is $1,803.

Working notes:

a.

Computation the total value of direct materials is:

Total value of direct materials = Value of direct materials of Assemly + Value of direct materials of Testing and Packaging

= $440 + $65

= $505

Hence, the total value of direct materials is $505.

b.

Computation the total value of direct labor is:

Total value of direct labor = Value of direct labor of Assemly + Value of direct labor of Testing and Packaging

= $493 + $187

= $680

Hence, the total value of direct labor is $680.

c.

Computation the direct labor hour of Assembly is:

Direct labor hour of Assembly = Value of direct labor of Assemly / Direct labor wage rate

= $493 / $34

= 14.5 hours

Hence, the direct labor hour of Assembly is 14.5 hours.

d.

Computation the direct labor hour of Testing and Packaging is:

Direct labor hour of Testing and Packaging = Value of direct labor of Testing and Packaging / Direct labor wage rate

= $187 / $34

= 5.5 hours

Hence, the direct labor hour of Testing and Packaging is 5.5 hours.

e.

Computation the value of overhead of Assembly is:

Value of overhead of Assembly = Predetermined overhead rate * Direct labor hour of Assembly

= $32 * 14.5

= $464

Hence, the value of overhead of Assembly is $464.

f.

Computation the value of overhead of Testing and Packaging is:

Value of overhead of Testing and Packaging = Predetermined overhead rate * Direct labor hour of Testing and Packaging

= $28 * 5.5

= $154

Hence, the value of overhead of Testing and Packaging is $154.

g.

Computation the value of total value of overhead is:

Value of total value of overhead = Value of overhead of Assembly + Value of overhead of Testing and Packaging

= $464 + $154

= $618

Hence, the value of total value of overhead is $618.

Part-2:

Computation the product cost of each unit is:

Product cost of each unit = Total manufacturing cost / Total units

= $1,803 / 10

= $180.30

Hence, the product cost of each unit is $180.30