Question

Mickley Company’s plantwide predetermined overhead rate is $20.00 per direct labor-hour and its direct labor wage rate is $13.00 per hour. The following information pertains to Job A-500:

Direct materials	$	240
Direct labor	$	260

Required:

1. What is the total manufacturing cost assigned to Job A-500?

2. If Job A-500 consists of 30 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.)

Answer 1

Solution :

Total Hours Worked on Job = Total Direct Labor Cost / Direct Labor Cost per Hour

= $ 260 / $ 13

= 20 Hours

(a) Manufacturing Cost Assigned to Jobs :

Manufacturing Cost Assigned to Jobs = Direct Material + Direct Labor + OH Applied

= $ 240 + $ 260 + (20 * $ 20)

= $ 240 + $ 260 + $ 400

= $ 900.

(b) Unit Product Cost :

Unit Product Cost = Total Manufacturing Cost / Total Units

= $ 900 / 30 Units

= $ 30 per Unit.

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