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16 September, 10:01

The following standard cost card is provided for Navid Company's Product A:

Direct material (2 lbs. @ $5.00 per lb.) $10.00

Direct labor (1 hr @ $8.00 per hr.) 8.00

Variable overhead (1 hr. @ $3.00 per hr.) 3.00

Fixed overhead (1 hr. @ $2.00 per hr.) 2.00

Total standard cost per unit $23.00

The fixed overhead rate is based on total budgeted fixed overhead of $12,000. During the period, the company produced and sold 5,800 units at the following costs:

Direct material 12,200 pounds @ $4.80 per pound

Direct labor 5,950 hours @ $8.00 per hour

Overhead $29,920

The standard manufacturing cost per unit is $23.00. What is the actual manufacturing cost per unit? (Do not round intermediate calculations.)

Cannot be determined from the information provided.

A. $17.96.

B. $23.46.

C. $36.16.

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Answers (1)
  1. 16 September, 10:07
    0
    The actual manufacturing cost per unit is 23.46

    Explanation:

    Step 1. Given information.

    Direct material $10.00 Direct labor $8.00 Variable overhead $3.00 Fixed overhead $2.00 Total standard cost per unit $23.00 overhead 29.920

    Step 2. Formulas needed to solve the exercise.

    Actual manufacturing cost per unit

    Direct materials = Fixed overhead * price direct material

    Direct labor = direct labor * price per hour

    cost per unit = Total cost / units sold

    Step 3. Calculation.

    (+) Direct materials = 12,200*4.80 = 58.560

    (+) Direct labor = 5,950*8 = 47.600

    (+) Overhead 29.920

    Total 136.080

    Cost per unit = 136,080/5,800

    Cost per unit = 23.46

    Step 4. Solution.

    The actual manufacturing cost per unit is 23.46
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