Question

A batch of 40 car batteries required $200 of directmaterials and 10 direct labor hours at $15 per hour.Estimated total overhead for the year was $760,000and estimated direct labor hours were 20,000. Whatwould be recorded as the cost of the batch?

Answer 1

Answer:

The cost of the batch amounts to $350

Explanation:

Cost of the batch is the expense or cost which is incurred in order to make the product or good in order to earn profit.

The cost of the batch is computed as:

Cost of batch = Direct material + Direct Labor

where

Direct material is $200

Direct Labor is computed as:

Direct labor = Hours × Rate per hour

= 10 × $15

= $150

Putting the values above:

Cost of batch = $200 + $150

Cost of batch = $350