Question

Harms Shoe Company applies manufacturing overhead based on the number of units as the cost driver. Information concerning costs for July follows: Direct labor costs 800 hours and $14 PER HOUR Manufacturing overhead $8,000 Direct materials $45,000 How much is the unit product cost if 1,000 units are produced

Answer 1

The $64.20 is the unit product cost.

Step-by-step explanation:

For computing the units produced for 1000 units, first we have to compute the total cost which is equals to

= Direct labor cost + direct material cost + manufacturing overhead

where,

Direct labor cost = labor hours × rate per hour

= 800 × $14

= $11,200

And. the manufacturing overhead = $8,000

Direct material = $45,000

Now put these values on the above equation

So,

Total units = $11,200 + $8,000 + $45,000

= $64,200

So the unit product cost is equals to

= Total cost ÷ number of units produced

= $64,200 ÷ 1,000

= $64.20

Hence, $64.20 is the unit product cost.