Detmer Liebold uses a job-order costing system with a single predetermined overh
ID: 2329615 • Letter: D
Question
Detmer Liebold uses a job-order costing system with a single predetermined overhead rate based on direct labor hours. The predetermined overhead rate is based on the following data: Total direct labor hours 70,000
Total fixed overhead cost 273,000
Variable manufacturing overhead per direct labor hour $6.00
Job 924 was recently completed with the following characteristics.
Number of units produced 50
Total direct labor hours 100 Direct materials $680
Direct labor cost $7,000
Complete the following table to calculate the unit product cost for Job 924:
Account Amount Calculations
Total fixed manufacturing overhead cost
+ Total variable manufacturing overhead cost
Total manufacturing overhead cost
/ Direct labor hours
Predetermined overhead rate
Direct materials
Direct labor
Manufacturing overhead applied
Total cost of Job 924
Total cost of Job 924 From calculation above
/ Number of units produced Unit product cost for Job 924
Explanation / Answer
Total fixed manufacturing overhead cost = $ 2,73,000 Total variable manufacturing overhead cost ($6 X 70,000 labor hours) = $ 4,20,000 Total manufacturing overhead cost = $ 6,93,000 Direct labor hours = 70,000 Predetermined overhead rate = $ 9.90 (Total manufacturing overhead cost/Direct labor hours) Direct material = $ 680 Direct labor = $ 7,000 Manufacturing overhead applied ($9.90 X 100 labor hours) = $ 990 Total cost of Job 924 = $ 8,670 No. of units produced = 50 Unit product cost for Job 924 = $ 173.40 (Total cost of Job 924/No. of units produced)
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