Question

Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour, and the fixed overhead rate is $1.60 per direct labor hour. Andrews expects to have 675 chairs in ending inventory. There is no beginning inventory of office chairs. unit product cost. budgeted ending inventory

Answer 1

Chair unit cost: $ 49.72

Total cost for 675 chairs: $ 33,561

Step-by-step explanation:

Direct Materials: $ 14.00

Direct Labor: 1.9 hours x $16 labor cost: $ 30.40

Overhead:

1.9 labor hours x ($ 1.6 variable rate + $ 1.20 fixed rate) = $ 5.32

Total unit cost: $ 49.72

Cost to produce 675 chairs:

675 charis x $ 49.72 per chair = $ 33,561‬