Curly Girl Manufacturing manufactures salon-quality hair dryers.Curly Girl applies overhead based on direct labor hours.The company's predetermined overhead rate was based on an estimated 480,000 direct labor hours and $1,728,000 estimated total overhead.During November, the company manufactured 22,400 hair dryers for Job CG12 and incurred the following costs: What is the unit cost of the hair dryers produced in Job CG12?

Question

Curly Girl Manufacturing manufactures salon-quality hair dryers.Curly Girl applies overhead based on direct labor hours.The company's predetermined overhead rate was based on an estimated 480,000 direct labor hours and $1,728,000 estimated total overhead.During November, the company manufactured 22,400 hair dryers for Job CG12 and incurred the following costs:  What is the unit cost of the hair dryers produced in Job CG12?

Quizplus · Accepted Answer

First, we need to calculate the predetermined overhead rate.

Predetermined overhead rate = Estimated total overhead cost / Estimated direct labor hours

Predetermined overhead rate = $1,728,000 / 480,000 = $3.60 per direct labor hour

Next, we need to calculate the total manufacturing cost for Job CG12.

Total manufacturing cost = Direct materials cost + Direct labor cost + Manufacturing overhead cost

Total manufacturing cost = $212,800 + $118,800 + ($3.60 x 25,600)

Total manufacturing cost = $212,800 + $118,800 + $92,160

Total manufacturing cost = $423,760

Finally, we can calculate the unit cost for Job CG12 by dividing the total manufacturing cost by the number of hair dryers manufactured.

Unit cost = Total manufacturing cost / Number of units

Unit cost = $423,760 / 22,400

Unit cost = $18.90

Therefore, the unit cost of the hair dryers produced in Job CG12 is $18.90, which is only listed in choice B. However, we need to remember that this is just the production cost, and there may be additional costs such as marketing and distribution that could affect the final selling price of the hair dryers.

Curly Girl Manufacturing Manufactures Salon-Quality Hair Dryers