Answer:
Unitary cost= $351
Explanation:
Giving the following information:
Overhead costs:
Setups= $240,000
General factory= $2,350,000
Machine processing= $120,000
Total overhead= $2,710,000
Total direct labor hours= 10,000 + 10,000= 20,000
<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= 2,710,000/20,000
Predetermined manufacturing overhead rate= $135.5 per direct labor hour
<u>Now, we can calculate the unitary cost for Product B:</u>
Direct materials $60
Direct labor: 2 hours at $10/hour $20
Unitary cost= 60 + 20 + 2*135.5
Unitary cost= $351
