Mickley Company’s predetermined overhead rate is $14.00 per direct labor-hour and its direct labor wage rate is $12.00 per hour. The following information pertains to Job A-500:

Mickley Company’s predetermined overhead rate is $14.00 per direct labor-hour and its direct labor wage rate is $12.00 per hour. The following information pertains to Job A-500:

Direct Materials: $230

Direct Labor: $108

Required:

  • What is the total manufacturing cost assigned to Job A- 500?

Total direct labor hours = (Direct labor cost / Direct labor wage rate per hour) = $108 / $12 = 9 hours

Manufacturing overhead applied = (Cost per direct labor hours x Total direct labor hour) = $14 per DLH x 9 hours) = $126

Manufacturing overhead total = (Direct materials + Direct labor + Manufacturing overhead applied) = $230 + $108 + $126 = $426

  • If Job A-500 consists of 40 units, what is the average cost assigned to each unit included in the job?

Unit production cost = Total manufacturing cost / Number of units in the job A-500 = $464 / 40 units = $11.60

 

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