Figure 15-4
-Refer to Figure 15-4.If the materials costs for both products are $75 per unit produced, and conversion costs are $120 per hour, what is the unit cost of Product A under the features and approach costing method?

Question

Figure 15-4   
-Refer to Figure 15-4.If the materials costs for both products are $75 per unit produced, and conversion costs are $120 per hour, what is the unit cost of Product A under the features and approach costing method?

Quizplus · Accepted Answer

Under features and approach costing method, the unit cost for Product A can be calculated as follows: 
Direct materials cost per unit + Direct labor cost per unit + (Conversion cost per hour x Total hours) / Number of units

Direct materials cost per unit = $75 
Direct labor cost per unit = $120 x (2 + 3) / 300 = $3.60 
Conversion cost per hour = $120 
Total hours = 2 + 3 = 5 
Number of units = 3000 / 60 = 50

Unit cost of Product A = $75 + $3.60 + ($120 x 5) / 50 = $87 per unit.