Weaver Company's Predetermined Overhead Rate Is 1800 Per Dir
Weaver Companys Predetermined Overhead Rate Is 1800 Per Direct Labo
Weaver Company's predetermined overhead rate is $18.00 per direct labor-hour, and its direct labor wage rate is $16.00 per hour. The following information pertains to Job A-200: direct materials cost $200, direct labor cost $160.
Required:
1. What is the total manufacturing cost assigned to Job A-200?
2. If Job A-200 consists of 90 units, what is the average cost assigned to each unit in the job? (Round your answer to 2 decimal places.)
Paper For Above instruction
The analysis of Job A-200 at Weaver Company involves calculating both the total manufacturing cost and the per-unit cost for the job based on given data and predetermined overhead rates. This process includes understanding overhead application, direct labor costs, and direct materials costs, which are fundamental elements in manufacturing cost accounting.
Step 1: Calculate Direct Labor Hours for Job A-200
The direct labor cost for Job A-200 is $160, and the hourly wage rate is $16.00 per hour. To find the direct labor hours used on this job, divide the total direct labor cost by the hourly wage rate:
\[
\text{Direct Labor Hours} = \frac{\text{Direct Labor Cost}}{\text{Wage Rate}} = \frac{160}{16} = 10 \text{ hours}
\]
Step 2: Calculate Applied Overhead
Using the predetermined overhead rate of $18.00 per direct labor-hour, multiply this rate by the labor hours to find total applied overhead:
\[
\text{Applied Overhead} = 10 \text{ hours} \times 18 = \$180
\]
Step 3: Calculate Total Manufacturing Cost
Total manufacturing cost includes direct materials, direct labor, and applied overhead:
\[
\text{Total Manufacturing Cost} = \text{Direct Materials} + \text{Direct Labor} + \text{Applied Overhead}
\]
\[
= 200 + 160 + 180 = \$540
\]
Thus, the total manufacturing cost assigned to Job A-200 is $540.
Step 4: Calculate the Average Cost Per Unit
Given that Job A-200 comprises 90 units, compute the average cost per unit by dividing the total manufacturing cost by the number of units:
\[
\text{Cost per Unit} = \frac{\text{Total Manufacturing Cost}}{\text{Number of Units}} = \frac{540}{90} = \$6.00
\]
Rounded to two decimal places, the average cost per unit is $6.00.
Conclusion:
The total manufacturing cost assigned to Job A-200 is $540, and the average cost per unit is $6.00. These calculations provide essential insights into product costing, pricing strategies, and profitability analysis for Weaver Company. Understanding and accurately applying overhead rates ensures proper cost control and financial reporting, which are crucial in competitive manufacturing environments.
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