Venus Manufacturing uses a predetermined overhead allocation rate based on percentage of direct labor cost. At the beginning of the year, they fixed the manufacturing overhead rate at 20% times the direct labor cost. In the month of June, Venus completed Job 13C the costs of which are as follows: $$\begin{array} { | l | r | }
\hline \text { Direct materials cost } & \$ 6,220 \
\hline \text { Direct labor cost } & \$ 900 \
\hline \text { Direct labor hours } & 32 \text { hours } \
\hline \text { Units of product produced } & 250 \text { units } \
\hline
\end{array}$$ What is the cost per unit of finished product of Job 13C?

Question

Venus Manufacturing uses a predetermined overhead allocation rate based on percentage of direct labor cost. At the beginning of the year, they fixed the manufacturing overhead rate at 20% times the direct labor cost. In the month of June, Venus completed Job 13C the costs of which are as follows: $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost } & \$ 6,220 \
\hline \text { Direct labor cost } & \$ 900 \
\hline \text { Direct labor hours } & 32 \text { hours } \
\hline \text { Units of product produced } & 250 \text { units } \
\hline
\end{array}$$ What is the cost per unit of finished product of Job 13C?

Quizplus · Accepted Answer

The correct answer is A.The manufacturing overhead cost for Job 13C is $900 x 20% = $180. The total cost of Job 13C is $6,220 + $900 + $180 = $7,300. The cost per unit of finished product is $7,300 / 250 units = $29.20.

Venus Manufacturing Uses a Predetermined Overhead Allocation Rate Based on Percentage