Irene Manufacturing Uses a Predetermined Overhead Allocation Rate Based on Percentage

question 22

Multiple Choice

Irene Manufacturing uses a predetermined overhead allocation rate based on percentage of direct labor cost. At the beginning of 2014, Irene estimated total manufacturing overhead costs at $1,050,000 and total direct labor costs at $840,000. In June, 2014, Job 711 was completed. Job stats are as follows: $$\begin{array} { | l | r | } \hline \text { Direct materials cost } & \$ 27,500 \\\hline \text { Direct labor cost } & \$ 13,000 \\\hline \text { Direct labor hours } & 400 \text { hours } \\\hline \text { Units of product produced } & 200 \\\hline\end{array}$$ How much was the cost per unit of finished product?

• A) $374.38
• B) $202.50
• C) $254.50
• D) $283.75

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