15) Paulson Company uses a predetermined overhead rate based on machine-hours to

Question

15) Paulson Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:

The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13.7 per machine-hour.

Compute the unit product cost that would appear on the job cost sheet for this job. (Do not round intermediate calculations and round your final answer to 2 decimal places. Omit the "$" sign in your response.)

  Direct materials $33,000   Direct labor $30,000   Advertising expense $23,000   Rent on factory building $21,500   Depreciation on factory equipment $14,500   Indirect materials $18,000   Sales salaries $36,000   Insurance on factory equipment $20,000

Explanation / Answer

Hi,

Please find the answer as follows:

15)

Predetermined Overhead Rate = (21500+14500+18000+20000)/28000 = 2.64

19)

Unit Product Cost = 60100 + 1340*14.7 + 1483*13.7 = 100115.10/3550 = 28.20

Thanks.

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