The total cost per unit is $475 which include direct materials, direct labor, overhead and direct labor costs.
Per unit cost = Accumulated job costs ÷ Number of units produced = (Beginning balance of $900 + Direct materials of $800 + Direct labor of $500 + Overhead of ($500 x $7)) ÷ 10 = ($900 + 800 + 500 + 3,500) ÷ 12 = 5,700 ÷ 12 = $475 per unit.
Overhead costs include things like hire and utilities, business licenses, accounting expenses, advertising and marketing prices, and payroll. those fees are pretty predictable and regular, whereas direct fees, along with uncooked substances or packaging components, are at once correlated to the products or services you provide.
In commercial enterprise, overhead or overhead fee refers to an ongoing price of running a enterprise. Overheads are the expenditure which cannot be simply traced to or recognized with any specific sales unit, unlike operating costs inclusive of uncooked fabric and exertions.
Overhead fees are people who are not associated without delay to the production pastime and are consequently taken into consideration indirect fees that should be paid although there's no manufacturing; examples encompass lease payable, utilities payable, insurance payable, and salaries payable to office body of workers, office supplies, and so forth.
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