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Welcome to the article Exercise 2 8 Applying Overhead Cost Computing Unit Product Cost Newhard Company assigns overhead cost to jobs on the basis of 110 of direct labor. On this page, you will learn the essential and logical steps to better understand the topic being discussed. We hope the information provided helps you gain valuable insights and is easy to follow. Let’s begin the discussion!

Exercise 2-8: Applying Overhead Cost; Computing Unit Product Cost

Newhard Company assigns overhead cost to jobs on the basis of 110% of direct labor cost. The job cost sheet for Job 313 includes $19,390 in direct materials cost and $10,100 in direct labor cost. A total of 1,400 units were produced in Job 313.

Required:
a. What is the total manufacturing cost assigned to Job 313?
b. What is the unit product cost for Job 313?

Answer :

Final answer:

The total manufacturing cost assigned to Job 313 is $40,600, and the unit product cost for Job 313 is $29.

Explanation:

a. Total manufacturing cost assigned to Job 313:

To determine the total manufacturing cost assigned to Job 313, we need to calculate the overhead cost based on the direct labor cost. Since the company assigns overhead cost as 110% of direct labor cost, we can calculate the overhead cost by multiplying the direct labor cost by 110%:

Overhead cost = $10,100 x 110% = $11,110

Total manufacturing cost assigned to Job 313 = Direct materials cost + Direct labor cost + Overhead cost = $19,390 + $10,100 + $11,110 = $40,600


b. Unit product cost for Job 313:

To find the unit product cost for Job 313, we divide the total manufacturing cost assigned to Job 313 by the number of units produced:

Unit product cost = Total manufacturing cost assigned to Job 313 / Number of units produced

Unit product cost = $40,600 / 1,400 = $29

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Rewritten by : Brahmana