Decenzo, Inc., manufactures and sells two products: Product L4 and Product O1.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: The direct labor rate is $18.20 per DLH.The direct materials cost per unit is $267.20 for Product L4 and $292.20 for Product O1.The estimated total manufacturing overhead is $774,120. The unit product cost of Product L4 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:

Question

Decenzo, Inc., manufactures and sells two products: Product L4 and Product O1.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  The direct labor rate is $18.20 per DLH.The direct materials cost per unit is $267.20 for Product L4 and $292.20 for Product O1.The estimated total manufacturing overhead is $774,120. The unit product cost of Product L4 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $774,120 ÷ 6,200 DLHs = $124.86 per DLH (rounded)
Computation of traditional unit product cost: 11ea7998_5e9f_00a5_911b_6d8351cbf0f6_TB2627_00_TB2627_00