Question

In: Computer Science

Job-order costing:

Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $497,000, variable manufacturing overhead of $2.40 per direct labor-hour, and 70,000 direct labor-hours. The company has provided the following data concerning Job T498 which was recently completed:

Number of units in the job

40

Total direct labor-hours

80

Direct materials

$ 950

Direct labor cost

$ 2,720

The unit product cost for Job T498 is closest to:

Solutions

Expert Solution

 

 

Particulars

Amount

Direct materials

$ 950

Direct labor cost

$ 2,720

Variable manufacturing overhead ($2.40 x 80)

$192

Fixed manufacturing overhead cost ($7.10 x 80)

$568

Total cost

$4,430

Divide by: No. of units

80

Unit product cost for Job T498 

$55.38

 

The unit product cost for Job T498 is closest to: $55.38 per unit

 


 

Working:                                 

 

Predetermined overhead rate = Total fixed manufacturing overhead cost / Total direct labor-hours

= $497,000 / 70,000 hours

 

= $7.10 per direct labor-hour       

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