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Mickley Company’s plantwide predetermined overhead rate is $18.00 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 $ 220 Direct labor $ 60 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?

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Answer:

Results are below.

Explanation:

Giving the following information:

Predetermined overhead rate= $18.00 per direct labor-hour

Direct labor wage rate= $12.00 per hour.

Job A-500

Direct materials $220

Direct labor $60

First, we need to calculate the direct labor hours:

Direct labor hours= 60/12= 5

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 18*5

Allocated MOH= $90

Finally, the unit cost:

Total cost= 220 + 60 + 90= $370

Unit cost= 370/60

Unit cost= $6.17

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