Barbicon Manufacturing Company uses a predetermined manufacturing overhead rate

Question

Barbicon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2012, they formulated a rate of 20% times the direct labor cost. In June, 2012, Barbicon completed job number 13C. Job stats are as follows: Direct materials cost $6,220 Direct labor cost $900 direct labor hours 32 hours Units of product produced: 250 kilos How much was the cost per unit (cost per kilo) of finished product? (Please round to the nearest cent.)

Explanation / Answer

$29.2

Unit cost = total unit cost / unit produced

Total cost = (Material cost + labour cost + overhead cost)

=$6220 + $900 + (20% * $900)

= ($6220 + 900 + 180)

= $7300

Unit cost = $7300/ 250 kilo

=$29.2 per kilo

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