A company uses a normal costing system and applies overhead at a rate of $5 per direct labor hour. During the year, the company had the following data for costs of Job A:[table]
Cost of raw materials | $ 510 Direct labor cost per hour | $ 39 per hour Hours used in production | 21 hours Predetermined overhead rate | $ 5 per direct labor hour
[/table]What is the total product cost of Job A?

Question

BlackTom AI · Accepted Answer

In a normal costing system, total product cost equals direct materials + direct labor + applied manufacturing overhead.

1. Relevant knowledge points and concepts
- Product cost components: direct materials (DM), direct labor (DL), and manufacturing overhead (MOH).
- Normal costing applies overhead using a predetermined overhead rate (POHR) multiplied by the actual activity base (here, direct labor hours).
- POHR is used instead of actual overhead to allocate overhead consistently during the period.

2. Complete reasoning process, step by step
- Start with the given direct materials cost for Job A.
- Calculate direct labor cost by multiplying the direct labor rate per hour by hours used.
- Calculate applied overhead by multiplying the predetermined overhead rate by the actual direct labor hours used.
- Sum DM + DL + applied MOH to get total product cost.

3. Calculations with intermediate steps
- Direct materials (DM) = $510 (given).
- Direct labor (DL) = $39 per hour × 21 hours
  = 39 × 21
  = (39 × 20) + (39 × 1)
  = 780 + 39
  = $819.
- Applied manufacturing overhead (MOH applied) = POHR $5 per DLH × 21 DLH
  = 5 × 21
  = $105.
- Total product cost = DM + DL + MOH applied
  = $510 + $819 + $105
  = $1,434.

4. Why the correct answer is correct
The normal costing method requires using the predetermined overhead rate ($5 per direct labor hour) applied to the actual hours worked (21) to allocate overhead. Adding that applied overhead to the actual DM and DL yields the full product cost for Job A. The arithmetic above shows this sum equals $1,434.

5. Other options
This is a short-answer problem with no multiple-choice alternatives provided. If common incorrect approaches were used (e.g., omitting overhead or using a wrong hourly multiplication), they would produce different totals; those are incorrect because they violate the normal costing formula.

6. Conclusion
The total product cost of Job A is $1,434, which matches the provided answer (1434).

类似问题

What cost concept used in applying the cost-plus approach to product pricing includes only total manufacturing costs in the cost amount to which the markup is added?

The information that would be of most interest to a sales manager of an electronics retailer would be:

A project has a required return of 12.6 percent, an initial cash outflow of $42,100, and cash inflows of $16,500 in Year 1, $11,700 in Year 2, and $10,400 in Year 4. What is the net present value?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单