Answered

Westonci.ca is the best place to get answers to your questions, provided by a community of experienced and knowledgeable experts. Discover comprehensive answers to your questions from knowledgeable professionals on our user-friendly platform. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields.

Company manufactures two products, Product C and Product D. The company estimated it would incur $177,910 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor hours. Data concerning the current period's operations appear below:

Product C Product D
Estimated volume 3,800 units 3,000 units
Direct labor hours per unit 1.20 hours 0.80 hour
Direct materials cost per unit $11.60 $23.70
Direct labor cost per unit $10.80 $7.20

Required:
a. Compute the predetermined overhead rate under the current method.
b. Determine the unit product cost of each product for the current year.

Sagot :

Answer:

Following are the responses to the given question:

Explanation:

[tex]\text{Predetermined Overhead Rate} = \frac{\text{Total Overhead cost}}{\text{Total Direct Labor hours}}[/tex]

                                                [tex]= \frac{177910}{( 3800 \times 1.2+3000 \times 0.80 )}\\\\ = \frac{177910}{(4560+2400)}\\\\ = \frac{177910}{6960}\\\\ = \$25.56 / DLH[/tex]  

                                                               [tex]Product C \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Product D[/tex]

[tex]\text{Cost of direct materials per unit} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 11.6 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 23.7\\\\\text{Cost of direct labor per unit} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 10.80 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 7.20\\\\\text{Cost of overhead per device} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 30.67 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 20.45\\\\[/tex]

[tex]\text{Cost per unit total} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 53.04 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 51.35\\\\\\\to 3800 \times 1.20 \times \frac{25.56}{3800} = 30.67\\\\\to 3000 \times 0.80 \times \frac{25.56}{3000} = 20.45[/tex]

We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.