Question

Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $468,000, variable manufacturing overhead of $2.10 per machine-hour, and 72,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 10 Total machine-hours 80 Direct materials $ 930 Direct labor cost $ 1,860

Answer 1

Unit cost= $347.8

Step-by-step explanation:

Giving the following information:

The total fixed manufacturing overhead cost of $468,000, variable manufacturing overhead of $2.10 per machine-hour, and 72,000 machine-hours.

Job A496:

Number of units in the job 10

Total machine-hours 80

Direct materials $ 930

Direct labor cost $ 1,860

First, we need to calculate the manufacturing overhead rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= (468,000/72,000) + 2.1= $8.6 per machine hour

Now, we can calculate the total cost:

Total cost= direct material + direct labor + manufacturing overhead

Total cost= 930 + 1,860 + (8.6*80)= $3,478

Unit cost= total cost/ number of units= 3,478/10= $347.8