Question

Fickel Company has two manufacturing departments—Assembly and Testing & Packaging. The predetermined overhead rates in Assembly and Testing & Packaging are $21.00 per direct labor-hour and $17.00 per direct labor-hour, respectively. The company’s direct labor wage rate is $23.00 per hour. The following information pertains to Job N-60:

	Assembly				Testing & Packaging
Direct materials	$	385			$	43
Direct labor	$	207			$	115

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

1. The manufacturing cost assigned to Job N-60 :

	Assembly	Testing & Packaging
Direct Materials	$ 385	$ 43
Direct Labor	$207	$ 115
Overhead	$ 189	$ 85
Total manufacturing cost assigned	$ 781	$ 243

Hence the manufacturing cost assigned = $ 781 + $ 243

= $ 1,024

Hence the correct answer is $ 1,024

Note :

Number of Direct Labor Hours = Direct Labor Cost / Direct Labor Cost Per Hour

	Assembly	Testing & Packaging
Direct Labor	$ 207	$115
Direct Labor Wage Per Hour	$ 23	$ 23
Number of Direct Labor Hours	9	5

Overhead = Number of Direct Labor Hours * predetermined overhead rates

	Assembly	Testing & Packaging
Number of Direct Labor Hours	9	5
predetermined overhead rates	$ 21	$ 17
Overhead	$ 189	$ 85

2. The unit product cost = The total manufacturing cost assigned to Job N-60 / Total Units

= $ 1,024/ 10

= $ 102.40

Hence the correct answer is $ 102.40