In 2011,Brunswick Plumbing Supplies planned the following:
Factory overhead costs $180,000
Direct labour costs 15,000 hours at $8.00 per hour) $120,000
Machine Hours 48,000
Direct material costs $108,000
The predetermined overhead rate is based on direct labour hours and planned production during 2011 is 12,000 units.The estimated cost per unit produced is:

Question

Quizplus · Accepted Answer

To calculate the predetermined overhead rate, we divide the total factory overhead costs by the total direct labour hours:

Predetermined overhead rate = $180,000 / 15,000 hours = $12.00 per direct labour hour

To calculate the overhead cost per unit, we multiply the predetermined overhead rate by the number of direct labour hours required to produce one unit:

Overhead cost per unit = $12.00 per direct labour hour x (Direct labour hours per unit)
= $12.00 per direct labour hour x (15,000 hours / 12,000 units)
= $15.00 per unit

To calculate the total cost per unit, we add the overhead cost per unit to the direct material cost per unit and the direct labour cost per unit:

Total cost per unit = $15.00 + $9.00 + $10.00
= $34.00

Therefore, the best choice is C) $34.00.

In 2011,Brunswick Plumbing Supplies Planned the Following