Job 827 was recently completed. The following data have been recorded on its job

Question

Job 827 was recently completed. The following data have been recorded on its job cost sheet:
Direct material...................................61,050
Direct Labor hrs................................1,332 labor hrs
Direct labor wage rate.....................$ 14 per labor rate
Machine hrs ................................. 1,480 machine hrs
Numbers of units completed,............. 3,700 units


The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour.



Compute the unit product cost that would appear on the job cost sheet for this job?

Explanation / Answer

Direct Materials $61,050 + Direct Labor $18,648 ($14 x 1332 DL hours) + Overhead $19,240 ($13 x 1480 machine-hours) = $98,938 total costs / 3700 units = $26.74 unit product cost.

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