Question

On March 1, Job 10 had a beginning balance of $500. During March, direct materials of $800 and direct labor of $300 were added to the job. Overhead is applied to production at a rate of 40% of direct labor. There are four units in Job 10. What is the unit cost? a.$312 b.$492 c.$850 d.$430

Answer 1

Total Unit cost is, 430 $Unit.

What is the direct labor meaning?

• Also known as productive labor, this type of labor is applied directly to a product during the production process in the form of machine operators, making the cost calculable, recognizable, and charged to the particular product.
• In contrast with indirect work.

What is direct labor vs indirect labor?

• Depending on the worker's contribution to the production process, labor expenses are typically divided into direct and indirect labor costs.
• While work performed on specific commodities or services is considered direct labor, employee activity that cannot be linked to or charged to the provision of goods or services is considered indirect labor.

According to the question:

CALCULATE UNIT COST :

AMOUNT

Beginning work in process  500.

Direct material                      800.

Direct labour                         300.

Overhead (300*40%)            120.

Total cost of job                    1720.

Units                                       4.

Unit cost                                 430.

Learn more about direct labor here:

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