Answer:
unit product cost is $154.50
option C is correct
Explanation:
Given data
fixed overhead cost = $665,000
variable overhead =70,000 @ $3.00 /machine hour = 3 × 700000 = $2100000
labor cost = $2,880
materials = $630
Number of units = 30
Total machine-hours = 90
to find out
unit product cost
solution
we know here variable cost and fixed overhead so
first we calculate total overhead that is
total overheads = Variable overheads + Fixed overheads cost
put these value
total overheads = 2100000 + 665000
total overheads is $875000
so that overhead rate will be
overhead rate = ( 875000 / 70,000 )
overhead rate is $12.5 / machine hour
and total product cost will be given by this formula that is
so, total product cost = Direct materials + Direct labors + Overheads
total product cost = 630 + 2880 + ( 12.5 × 90 )
total product cost is $4635
so that now we can say unit product cost will be
unit product cost = 4635 / 30
so unit product cost is $154.50
hence option C is correct