Figure 1
Harrison Co. produces two products, AB and XY. Information about the current period's production is as follows:
Harrison uses a plantwide rate of £4 per machine hour to apply overhead to production. Budgeted overhead was £392,000, but actual overhead was £376,000.
-Refer to Figure 1 above. What was Harrison Company's unit manufacturing cost for product XY?
A) £10.00
B) £13.69
C) £3.69
D) £13.38

Question

Quizplus · Accepted Answer

To calculate the unit manufacturing cost of product XY, we need to calculate the total cost of producing product XY, including direct materials, direct labor, and overhead costs.

From the table, we can see that the total direct materials and direct labor costs for product XY are £6.30 and £4.00, respectively. Therefore, the total variable cost of producing product XY is £10.30.

To calculate the total overhead cost allocated to product XY, we need to use the plantwide rate of £4 per machine hour. From the table, we can see that the total machine hours for product XY are 29,000. Therefore, the total overhead cost allocated to product XY is:

£4 x 29,000 = £116,000

The total cost of producing product XY is:

£6.30 + £4.00 + £116,000/10,000 units = £13.69 per unit.

Therefore, the correct answer is B.

Figure 1 Harrison Co. Produces Two Products, AB and XY. Information About