Sheddon Industries produces two products. The products' identified costs are as follows: $$\begin{array} { l c c }
& \text {Product A } & \text { Product B} \
\text { Direct materials } & \$ 20,000 & \$ 15,000 \
\text { Direct labor } & \$ 12,000 & 24,000
\end{array}$$ The company's overhead costs of $108,000 are allocated based on direct labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What is the cost per unit for product B? (Do not round intermediate calculations.)
A) $7.80
B) $22.20
C) $16.80
D) None of the answers are correct.

Question

Sheddon Industries produces two products. The products' identified costs are as follows: $$\begin{array} { l c c } 
& \text {Product A } & \text { Product B} \
\text { Direct materials } & \$ 20,000 & \$ 15,000 \
\text { Direct labor } & \$ 12,000 & 24,000
\end{array}$$ The company's overhead costs of $108,000 are allocated based on direct labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What is the cost per unit for product B? (Do not round intermediate calculations.)
A) $7.80
B) $22.20
C) $16.80
D) None of the answers are correct.

Quizplus · Accepted Answer

The Answer of Sheddon Industries produces two products. The products' identified costs are as follows: $$\begin{array} { l c c } 
& \text {Product A } & \text { Product B} \
\text { Direct materials } & \$ 20,000 & \$ 15,000 \
\text { Direct labor } & \$ 12,000 & 24,000
\end{array}$$ The company's overhead costs of $108,000 are allocated based on direct labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What is the cost per unit for product B? (Do not round intermediate calculations.)
A) $7.80
B) $22.20
C) $16.80
D) None of the answers are correct.

Sheddon Industries Produces Two Products The Company's Overhead Costs of $108,000 Are Allocated Based on as Follows