question archive One morning, a customer brings a rush order of 2,600 units of product X at a unit sales price of 50 per unit
One morning, a customer brings a rush order of 2,600 units of product X at a unit sales price of 50 per unit
Subject:AccountingPrice:2.86 Bought3
One morning, a customer brings a rush order of 2,600 units of product X at a unit sales price of 50 per unit. The company agrees to produce the goods at weekend. The regular working days of the company is from Monday to Friday. Sixty of the direct labor employees who earns 50 per hour worked eight hours each day on Saturday and Sunday to complete the job. The company's policy on overtime during weekend is time and a half. Materials costing 3 per unit was used on the order. Overhead rate is 12 per hour. What is the total product cost per unit of product X?
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Direct labor cost = 60 employees x 8 hours per day x 2 days x ($50 per hour x (1+0.50)) = $72,000
Total direct labor hours = 60 x 8 x 2 = 960
Direct labor hour per unit = 72,000 / 2,600 = 27.69230769
Overhead per unit = (960 x 12) / 2,600 = 4.430769231
Product cost per unit = DM + DL + Overhead = $3 + 27.69230769 + 4.430769231 = 35.12307692, or 35.12
