Answer:
Unitary cost= $41.2
Explanation:
<u>First, we need to calculate the predetermined overhead rate:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (54,400/32,000)
Predetermined manufacturing overhead rate= $1.7 per direct labor hour
<u>Now, we can allocate overhead based on actual direct labor hours:</u>
<u></u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Direct labor hours= 1,664 / 5.2= 320
Allocated MOH= 1.7*320= $544
<u>Finally, the total cost and unitary cost:</u>
Total cost= 544 + 1,664 + 2,736
Total cost= $4,944
Unitary cost= 4,944 / 120
Unitary cost= $41.2
