Answer:
Unitary cost= $11.2
Explanation:
Giving the following information:
Estimated overhead= $30,000
Estimated machine-hours= 150,000
It takes 6 machine hours per bicycle, a direct material cost of $5 per bicycle, and direct labor of $5 per bicycle.
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 30,000/150,000
Predetermined manufacturing overhead rate= $0.2 per machine hour
Now, we can determine the unitary cost:
Unitary cost= 5 + 5 + 0.2*6= $11.2
