Question

Find these 6 values. Thank you. DIRECT MATERIALS – QUANTITY PER UNIT                               &

Find these 6 values. Thank you.

DIRECT MATERIALS – QUANTITY PER UNIT                                                            10

UNIT COST                                                                                                                          $20        

TOTAL UNIT MATERIAL COST ?   

PRODUCT LABOR HOURS PER UNIT                                                                           20                          

LABOR RATE PER HOUR                                                                                                 $10        

TOTAL UNIT LABOR COST ?   

APPLIED MANUFACTURING OVERHEAD UNIT COST ?   

TOTAL PRODUCT COST ?   

QUANTITY TO BE PRODUCED                                                                                      25,000                  

SELLING PRICE- THREE TIMES UNIT COST ?   

MANUFACTURING OVERHEAD COST:                                                                     

1. DEPRECIATION                                  $400,000

2. UTILITIES                                             $150,000

3. SUPPLIES                                             $150,000

4. TAXES                                                   $100,000

5. INSURANCE                                          $200,000

ESTIMATED TOTAL COST                                                                                               $1,000,000

ESTIMATED TOTAL LABOR HOURS                                                                             500,000

PREDETERMINED OVERHEAD RATE ?

Business   Accounting   
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Answer #1
Unit material cost=Quantity per unit*Unit cost=10*20= $200
Unit labor cost=Labor hours per unit*labor rate per hour=20*10=$200
Predetermined overhead rate=Estimated total cost/Estimated total labor hours=1000000/500000=$ 2 per labor hour
Applied manufacturing overhead unit cost=Labor hours per unit*Predetermined overhead rate=20*2=$40
Total product cost:
$
Unit material cost 200
Unit labor cost 200
Applied manufacturing overhead 40
Total product cost (Sum of above 3) 440
Selling price=3*Unit product cost=3*440=$ 1320
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