Question

Mickley Company’s plantwide predetermined overhead rate is $20.00 per direct labor-hour and its direct labor wage rate is $10.00 per hour. The following information pertains to Job A-500: Direct materials $ 260 Direct labor $ 100 Required:

1. What is the total manufacturing cost assigned to Job A-500?
2. If Job A-500 consists of 60 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.)

Answer 1

The total manufacturing cost assigned to Job A-500 is $560. The unit product cost for Job A-500 is $9.33 when rounded to two decimal places.

Step-by-step explanation:

We first need to calculate the total manufacturing cost assigned to Job A-500, which consists of direct materials, direct labor, and applied manufacturing overhead based on the plantwide predetermined overhead rate.

Direct materials: $260

Direct labor: $100 (which indicates that 10 hours of labor was used because the direct labor wage rate is $10 per hour)

To calculate the applied manufacturing overhead, we multiply the total direct labor-hours by the plantwide predetermined overhead rate:

Applied manufacturing overhead: 10 hours × $20.00 per hour = $200

Now we can calculate the total manufacturing cost:

Total manufacturing cost = Direct materials + Direct labor + Applied manufacturing overhead

Total manufacturing cost = $260 + $100 + $200 = $560

Next, we need to determine the unit product cost for this job. Since Job A-500 consists of 60 units, we can calculate this as follows:

Unit product cost = Total manufacturing cost / Number of units

Unit product cost = $560 / 60 units = $9.33 (rounded to two decimal places)