A company has identified the following overhead costs and cost drivers for the c
ID: 3419669 • Letter: A
Question
A company has identified the following overhead costs and cost drivers for the coming year:
Budgeted direct labor cost was $135,600 and budgeted direct material cost was $381,680. The following information was collected on three jobs that were completed during the year:
If the company uses traditional costing and allocates overhead using direct labor cost, what is the cost of each unit of Job 102?
$491.80.
$379.50.
$611.80.
$354.30.
A company has identified the following overhead costs and cost drivers for the coming year:
Explanation / Answer
For 40 units of job 102 cost of
Direct Matirial = 10500
Direct Labor = 2400
Machine Setup = 27600 /230 *1 = 120
Inspection = 130200/4650 * 8 =224
Material Handling = 100800/6300 * 8 = 128
Engineering = 12600 /630 * 40 = 800
Total cost = 14172
Cost for 40 units = 14172
Cost for 1 unit = 14172 /40
= $ 354.30 ANSWER
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