Reference no: EM132605030

Question - Job Costing, budgeted rates, unit costs (4-24) Lytton Ltd. Uses a normal job-costing system with two direct cost categories (direct material and direct labour) and one indirect cost pool. It allocates manufacturing overhead to jobs using a predetermined overhead rate based on direct labour hours. At the start of the year, company estimate that manufacturing overhead would be $632,000, and direct labour hours were estimated at 32,000 hours for the year. In November, Job X905 was completed. Materials costs on the job totalled $13,200 and labour cost totalled $ 10,120 at $22 per hour. At the end of the year it was determined that the company worked 34,100 direct labour hours for the year and incurred $656,125 in the actual manufacturing overhead cost.

Required -

1. Job X905 contained 600 units. Determine the unit cost that would appear on the job cost sheet.

2. Assuming Lytton prices its products to achieve a 25% margin. What would be the selling price of a Job X905?

3. Determine the underallocated or overallocated overhead for the year.