The Following Are Costs for a Selected Period: Direct Materials

question 17

Multiple Choice

The following are costs for a selected period: direct materials put into production, $97,000.00; direct labor cost of converting materials into product, $200,000; total indirect costs of manufacturing the product, $40,000. What is the per unit cost of manufacturing 20,000 units in this period?

• A) $4.85
• B) $16.85
• C) $8.85
• D) $12.85

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Definitions:

Casting Department

A specific section within a manufacturing facility where the process of casting—shaping material by pouring it into a mold and allowing it to solidify—is performed.

Machine-Hour

A unit of measure for the operational time of machinery, critical for calculating production costs and efficiency in a manufacturing context. This is essential in allocating costs based on the usage duration of machinery.

Predetermined Overhead Rate

A rate calculated before the period begins, used to allocate overhead costs to products or services based on a certain activity base.

Labor-Hours

Labor-Hours measure the total hours worked by employees, typically within a specified period for payroll or productivity analysis.