Question

In its job-order costing system, Morris Equipment Company uses a predetermined overhead rate based on direct...

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:

Homework Answers

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]
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