Newhard Company assigns overhead cost to Jobs on the basis of 125% of direct labor cost. The job cost sheet for Job 313 includes $10,000 in direct materials cost and $12,000 in direct labor cost. A total of 1,000 units were produced in Job 313.

Required:

a. What is the total manufacturing cost assigned to Job 313?

b. What is the unit product cost for Job 313?

a. Total manufacturing cost
b. Unit product cost

a. Total manufacturing cost is $37,000

b. Unit product cost is $37 per unit

Explanation:

The total manufacturing cost is the sum of the direct and indirect costs. The indirect costs are also known as overheads.

Given that the job cost sheet for Job 313 includes $10,000 in direct materials cost and $12,000 in direct labor cost,

Total direct cost = $10,000 + $12,000

= $22,000

Also given that the Company assigns overhead cost to Jobs on the basis of 125% of direct labor cost

Total overheads = 125% * $12,000

= $15,000

Hence total manufacturing cost

= $22,000 + $15,000

= $37,000

Given that 1,000 units were produced,

Unit cost = $37,000/1000

= $37 per unit

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