4. Murray Manufacturing produces three products. The products’ identified costs

Question

4. Murray Manufacturing produces three products. The products’ identified costs are as follows:

Product A

Product B

Product C

Direct Materials

$20,000

$16,000

$34,000

Direct Labor

$13,000

$12,000

$15,000

The company’s overhead costs $220,000 are allocated based on direct costs. Assume that 8,000 units of Product A, 10,000 units of Product B, and 16,000 units of Product C are produced.

a.      What is the total amount of production costs that will be accumulated for each product line?

b.     What is the cost per unit for each product line?

Product A

Product B

Product C

Direct Materials

$20,000

$16,000

$34,000

Direct Labor

$13,000

$12,000

$15,000

Explanation / Answer

Answer:-

Murray Manufacturing co. Calculation of Production costs Particulars Product A Product B Product C $ $ $ Direct Materials 20000 16000 34000 Direct Labor 13000 12000 15000 Overhead costs (220000*13000/40000)=71500 (220000*12000/40000)=66000 (220000*15000/40000)=82500 Total production costs (a) 104500 94000 131500 No. of units produce (b) 8000 10000 16000 Cost per unit (c=a/b) 13.06 9.4 8.22

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.