Starfish Enterprises produces men’s sports coats that are sold by popular depart

Question

Starfish Enterprises produces men’s sports coats that are sold by popular department stores. Each retail order is treated as a job that accumulates materials, labor, and overhead costs for a batch of sports coats. Management has obtained data on the labor costs for four selected jobs over a six-month period. Each selected job represents a similar style and size of sports coat. The data are as follows: Count Direct Labor Hour Direct Labor Rate per Hour Total Direct Labor Cost Job 107 10 4.50 14.00 63.00 Job 125 14 7.00 14.00 98.00 Job 160 16 8.80 14.00 123.20 Job 190 8 3.20 14.00 51.20 The direct labor cost per unit for Job 125 is ________.

Explanation / Answer

The direct labor cost per unit for Job 125 is $7.00

Direct labor cost per unit = total direct labor cost / number of units = 98/14 = $7.00 Direct labor cost per unit

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