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:
--Unit Product Cost on the Job # 274 = $ 42 per unit
|C= A/B||Overhead rate per DL||$2.50|
|D||Direct labor cost for Job #274||$2,400|
|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|
|L = J/K||Unit Product Cost||$42.00 [Answer]|
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