Question

Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.

Direct material cost per unit of G2 $13
Total estimated manufacturing overhead $312,000
Total cost per unit of G2 $28
Total estimated direct labor hours 156,000 DLH
Direct labor cost per unit of G2 $4.85
a. 5.08 DLH per unit of G2.
b. 17.85 DLH per unit of G2.
c. 8.60 DLH per unit of G2.
d. 0.52 DLH per unit of G2.
e. 2.00 DLH per unit of G2.

Answer 1

a. 5.08 DLH per unit of G2.

Step-by-step explanation:

The calculation is given below:

We know that

Direct material + direct labor + applied overhead = Total cost

$13 + 4.85 + x = 28

x = 28 - 13 - 4.85 1

= 10.15 overhead per unit

Now

Estimated overhead rate

= $312000 ÷ 156000

= 2.0

So, the Direct labor hours per unit is

= 10.15 ÷ 2

= 5.08