Question

At the beginning of the year, Rangle Company expected to incur $49,000 of overhead costs in producing 4,900 units of product. The direct material cost is $24 per unit of product. Direct labor cost is $34 per unit. During January, 450 units were produced. The total cost of the units made in January was:

A. $30,600
B. $4,500
C. None of the answer is correct

Answer 1

The total cost of the units made in January is $30,600.

Step-by-step explanation:

To calculate the total cost of units made in January, we need to consider the overhead costs, direct material cost, and direct labor cost.

The overhead costs for producing 4,900 units at the beginning of the year were $49,000. To find the overhead costs for 450 units produced in January, we can use the formula:

Overhead costs for January = (Overhead costs at the beginning of the year / Number of units at the beginning of the year) x Number of units produced in January

Plugging in the values:

Overhead costs for January = ($49,000 / 4,900) x 450 = $4,500

The direct material cost per unit is $24, so the total direct material cost for 450 units is 450 x $24 = $10,800.

The direct labor cost per unit is $34, so the total direct labor cost for 450 units is 450 x $34 = $15,300.

To find the total cost of the units made in January, we add the overhead costs, direct material cost, and direct labor cost: $4,500 + $10,800 + $15,300 = $30,600.

Therefore, the total cost of the units made in January is $30,600 (option A).