Job 7890 Was Recently Completed The Company Applies Manufacturing Overhead on the Basis of Machine-Hours

question 76

Essay

Job 7890 was recently completed.The following data have been recorded on its job cost sheet:
$$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 45,000 \\\hline \text { Direct labor-hours } & 630 \text { laborhours } \\\hline \text { Direct labor wage rate } & \$ 13 \text { per labor-hour } \\\hline \text { Machine-hours } & 390 \text { machine-hours } \\\hline \text { Number of units completed } & 3,000 \text { units } \\\hline\end{array}$$
The company applies manufacturing overhead on the basis of machine-hours.The predetermined overhead rate is $12 per machine-hour.Required:
Compute the unit product cost that would appear on the job cost sheet for Job 7890.

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Definitions:

Cost Line

A graphical representation of the costs incurred by a company, set against a range of production or service volumes.

Relevant Range

The range of activity within which the assumptions about fixed and variable costs are valid for the purposes of cost behavior analysis and budgeting.

Activity Levels

Various measures of activity within a company, such as production volume or sales, that can influence costs and operational performance.

Per Unit Costs

Refers to the cost associated with producing or acquiring a single unit of product or service, inclusive of all variable and allocated fixed costs.