Answer:
Unitary cost= $765.38
Explanation:
Giving the following information:
The company makes 430 units of product D28K a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year.
The product's direct materials cost is $35.82 per unit and its direct labor cost is $29.56 per unit.
Unitary cost= direct material + direct labor + allocated overhead
<u>We don't have enough information to allocate overhead. </u>
<u>Assuming the overhead gets allocated based on machine hours, I will invent an overhead rate and cost to allocate.</u>
Estimated overhead= 300,000
Machine hours= 690
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 300,000/690= $434.78 per machine hour
<u>A unit uses:</u>
690/430= 1.61 machine hours
Unitary cost= direct material + direct labor + allocated overhead
Unitary cost= 35.82 + 29.56 + (1.61*434.78)= $765.38
