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Answer: Total cost of the units made in January = $38,500
Explanation:
Given that,
At the beginning of the year, overhead costs = $59,000
Units produced at this cost = 5900 units
Direct material cost = $25 per unit
Direct labor cost = $35 per unit
Units produced during January = 550 units
Predetermined overhead rate =
=
= $10 per unit
Now,
Costs incurred in January:
Direct material cost = $25 per unit × 550 units = $13750
Direct labor cost = $35 per unit × 550 units = $19250
Overhead cost = $10 per unit × 550 units = $5500
∴ Total cost of the units made in January = Direct material cost + Direct labor cost + Overhead cost
= 13750 + 19250 + 5500
= $38,500