Question

Fickel Company has two manufacturing departments—Assembly and Testing & Packaging. The predetermined overhead rates in Assembly and Testing & Packaging are $27.00 per direct labor-hour and $23.00 per direct labor-hour, respectively. The company’s direct labor wage rate is $29.00 per hour. The following information pertains to Job N-60:

	Assembly				Testing & Packaging
Direct materials	$	415			$	55
Direct labor	$	348			$	87

Required:

1. What is the total manufacturing cost assigned to Job N-60? (Do not round intermediate calculations.)

2. If Job N-60 consists of 10 units, what is the unit product cost for this job? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer 1

For Allocated Overheads :

For Assembly :

Direct Labour = $ 348

Rate per hour = $ 29

Direct Labour Hours = $ 348 / $ 29 = 12 hours

Pre determined Overhead rate = $ 27 per labour hour

Allocated overheads = 12 hours x $ 27 = $ 324

For Testing & Packaging :

Direct Labour = $ 87

Cost per hour = $ 29

Direct Labour Hours = $ 87 / $ 29 = 3 hours

Pre determined overhead rate = $ 23 per labour hour

Allocated Overheads = 3 hours x $ 23 = $ 69

Therefore, for job N60,

Total Manufacturing Cost = Total Assembly Cost + Total Testing & Packaging Cost

= ( 415 + 348 + 324 ) + ( 55 + 87 + 69 )

= $ 1,087 + $ 211

= $ 1,298

Total Manufacturing Cost for Job N60 = $ 1,298

In Job N60,

Total Units Produced = 10 units

Unit Product Cost = Total Cost / Total Units Produced

= $ 1,298 / 10

= $ 129.80 per unit

Ans :

1. $ 1,298

2. $ 129.80

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