Any help with this would be greatly appreciated. MSB company manufactures produc

Question

Any help with this would be greatly appreciated.

MSB company manufactures products X and Z. Data for the products follow: Direct Direct Labor Hours Annual Total Direct Material Cost Product per Unit Production Lab Hours per Unit X 1.8 5,000 9,000 $72 Z 0.9 30,000 27,000 50 36,000 Manufacturing overhead is $1,800,000. The direct labor rate is $10 per hour. The company uses direct labor hours to allocate overhead to products. A) Using the direct labor hour allocation method, compute the predetermined overhead rate per labor hour. 4 points B) Given (A), what is the per-unit production cost of each product? 6 points

Explanation / Answer

A. Predetermined O/H Rate:

Predetermined O/H Rate per Direct Labor Hour = Manufacturing O/H / Direct Labor Hour

= 1,800,000 / 36,000 = $50 Per Labor Hour

B. Per Unit Production Cost:

Amount($)X Amount($)Z Direct Material 72 50 Direct Labor 18 9 Manufacturing O/H 90 45 Total Per Unit Cost 180 104

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