Question
Shrajah Company makes two products, Standard and Unique. The Standard product line is a high-volume line, and the Unique line is a low-volume, specialized product.
Shrajah Company makes two products, Standard and Unique. The Standard product line is a high-volume line, and the Unique line is a low-volume, specialized product. In the past, Sharjah Company used machine hours to apply overhead to its products. Late last year, a POR was developed using the following data:
Budgeted annual overhead cost:: $ 2,000,000
Estimated machine hours 20,000 hours
The POR would be:
Other per unit costs for the two products are:
Standard Unique
Direct material $ 100 $ 200
Direct labor 20 30
Actual results for the month of January are:
Standard Unique
Actual production (units) 1,000 units 200 units
Actual machine hours 1,500 MH 500 MH
Using a single budgeted MOH rate to apply overhead
Compute total product cost and the cost per unit for each product in January using a single rate to allocate manufacturing overhead to the products.
Standard Unique
Total MOH Cost
Per Unit Cost
Direct materials
Direct labor .
Manufacturing overhead _____ _____
Unit Product Cost $ $
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