Cassano, Inc., manufactures and sells two products: Product C8 and Product E6. D
ID: 2426280 • Letter: C
Question
Cassano, Inc., manufactures and sells two products: Product C8 and Product E6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
The direct labor rate is $19.80 per DLH. The direct materials cost per unit is $145.10 for Product C8 and $181.00 for Product E6. The estimated total manufacturing overhead is $671,598.
The unit product cost of Product C8 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:
$470.00 per unit
$348.74 per unit
$666.56 per unit
$658.94 per unit
Expected Production Direct Labor-Hours Per Unit
Total Direct Labor-Hours Product C8 800 6.0 4,800 Product E6 600 9.0 5,400 Total direct labor-hours 10,200
Explanation / Answer
Cost per unit = 6 x 19.80 + 145.10 + 671598/10200 x 6
= 658.94
Thus answer will be $658.94 per unit
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