Exercise 2-4 Computing Total Job Costs and Unit Product Costs Using Multiple Pre

Question

Exercise 2-4 Computing Total Job Costs and Unit Product Costs Using Multiple Predetermined Overhead Rates [LO2-4] Fickel Company has two manufacturing departments-Assembly and Testing & Packaging. The predetermined overhead rates in Assembly and Testing & Packaging are $16.00 per direct labor-hour and $12.00 per direct labor-hour, respectively. The company's direct labor wage rate is $20.00 per hour. The following information pertains to Job N-60: Assembiy $ 340 $ 180 Testing& Packaging $ 25 $ 40 Direct materials Direct labor ces Required: 1. What is the total manufacturing cost assigned to Job N-60? 2. If Job N-60 consists of 10 units, what is the unit product cost for this job? (Round your answer to 2 decimal places.) 1. Total manufacturing cost 2. Unit product cost per unit

Explanation / Answer

2-4

Direct labour hours used in Assembly department = $180/$20 = 9 hours

Labor hours used in testing & packing = $40/$20 = 2 hours

Total manufacturing cost = $340 + $25 + $180 + $40 + (9*$16) + (2*$12)

= $340+$25+$180+$40+$144+$24 = $753

2. Unit product cost = $753/ 10 = $75.30 per unit

2-8

Total manufacturing cost = $10000 + $12000 + (125%*$12000)

= $10000+$12000+$15000

= $37000

b. unit product cost = $37000/1000 = $37 per unit

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