Question

In its job-order costing system, Morris Equipment Company uses a predetermined overhead rate based on direct labor-hours. At the start of the year, MOH cost was estimated at $100,000 for the year. And, the number of DL hours to be used during the year was estimated at 40,000.

In September, Job #274 was completed at a cost of $5,000 in direct materials and $2,400 in direct labor. The labor rate is $6 per hour. By the end of the year, Morris had used a total of 45,000 direct labor-hours and had incurred $110,250 actual MOH cost.

If Job #274 contained 200 units, the unit product cost on the this job would be:

Answer 1

--Unit Product Cost on the Job # 274 = $ 42 per unit

A	Estimated MOH	$100,000
B	Estimated DL	40000
C= A/B	Overhead rate per DL	$2.50
D	Direct labor cost for Job #274	$2,400
E	Labor rate	$6.00
F = D/E	DLHs used	400
G	Direct material cost	$5,000
H = D	Direct labor cost for Job #274	$2,400
I = C x F	Overhead cost allocated	$1,000
J = G+H+I	Total cost for Job #274	$8,400
K	Units	200
L = J/K	Unit Product Cost	$42.00 [Answer]