Freshy Milk Company produces dairy equipment.Most of its jobs have a number of units per job.The company has two different departments through which all jobs pass.Overhead is applied using a plant wide rate of $15 per direct labor hour.Direct labor wages average $6 an hour.Data for Job #3 for the year is:

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Compute the cost per unit.(Note: Round the unit cost to two decimal places.)

Question

Freshy Milk Company produces dairy equipment.Most of its jobs have a number of units per job.The company has two different departments through which all jobs pass.Overhead is applied using a plant wide rate of $15 per direct labor hour.Direct labor wages average $6 an hour.Data for Job #3 for the year is:

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Compute the cost per unit.(Note: Round the unit cost to two decimal places.)

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Compute the cost per unit.(Note: Round the unit cost to two decimal places.)

Quizplus · Accepted Answer

11ea8a4c_48f7_ac78_a0e6_a317a795d6e9_TB5550_00 *Overhead = ($60,000 / $6) = 10,000 direct labor hours × $15/hour = $150,000
Cost per unit = Total cost / Total units produced = $240,000 / 34,000 units = $7.06

Freshy Milk Company Produces Dairy Equipment