Question

Newhard Company assigns overhead cost to jobs on the basis of 116% of direct labor cost. The job cost sheet for Job 313 includes $20,504 in direct materials cost and $10,600 in direct labor cost. A total of 1,400 units were produced in Job 313. Required: a. What is the total manufacturing cost assigned to Job 313? b. What is the unit product cost for Job 313?

Answer 1

Answer: (a) Total manufacturing cost = $43,400

(b) Unit product cost = $31

Explanation:

Given that,

Overhead cost to jobs = 116% of direct labor cost

                                      = 116% of $10,600

                                      = $12,296

Direct materials cost = $20,504

Direct labor cost = $10,600

Units Produced = 1,400

(a) Total manufacturing cost = sum of direct labor cost+ direct material cost+ overheads

                                               = $10,600 + $20,504 + $12,296

                                               = $43,400

(b) Unit product cost = $\frac{Total\ manufacturing\ cost}{No.\ of\ units\ produced}$

                                  = $\frac{43,400}{1,400}$

                                  = $31