Irene Manufacturing Uses a Predetermined Overhead Allocation Rate Based on Direct

question 128

Multiple Choice

Irene Manufacturing uses a predetermined overhead allocation rate based on direct labor cost. At the beginning of the year, the company estimated total manufacturing overhead costs at $1,020,000 and total direct labor costs at $820,000. In June, Job 711 was completed. The details of Job 711 are shown below. $$\begin{array} { | l | r | } \hline \text { Direct materials cost } & \$ 21,500 \\\hline \text { Direct labor cost } & \$ 10,000 \\\hline \text { Direct labor hours } & 400 \text { hours } \\\hline \text { Units of product produced } & 200 \text { units } \\\hline\end{array}$$ How much was the cost per unit of finished product? (Round any percentages to two decimal places and your final answer to the nearest cent.)

• A) $157.50
• B) $197.70
• C) $169.70
• D) $219.70

---

Definitions:

SBU

Acronym for Strategic Business Unit, a separately managed division or unit of a company that has its own mission, objectives, and competitors.

Means-end Fashion

A logical manner of thinking that focuses on achieving specific outcomes through the most efficient use of resources or actions.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.

Sustainable

The ability to maintain or improve certain processes or states indefinitely without depleting resources or causing harmful effects on the environment or social fabric.