Compute the per-unit manufacturing cost for job

Reference no: EM13940331

Job Cost Using Plantwide and Departmental Overhead Rates

Lindberg Company uses a normal job-order costing system. There are two departments, Assembly and Finishing, through which most jobs pass. Selected budgeted and actual data for the past year follow:

	Assembly	Finishing
Budgeted overhead	$330,000	$1,000,000
Actual overhead	110,000	520,000
Expected activity (direct labor hours)	150,000	25,000
Expected machine hours	25,000	125,000

During the year, several jobs were completed. Data pertaining to one such job, Job 330, follow:

Direct materials	$730,000
Direct labor cost:
Assembly (5,000 hours @ $12 per hr.)	$60,000
Finishing (400 hours @ $12 per hr.)	$4,800
Machine hours used:
Assembly	100
Finishing	1,200
Units produced	10,000

Lindberg Company uses a plantwide predetermined overhead rate based on direct labor hours (DLH) to assign overhead to jobs.

Required:

1. Compute the predetermined overhead rate.

2. Using the predetermined rate, compute the per-unit manufacturing cost for Job 330. (Round the unit cost to the nearest cent.)

3. Recalculate the unit manufacturing cost for Job 330 using departmental overhead rates. Use direct labor hours for Assembly and machine hours for Finishing.

Reference no: EM13940331

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