Questions: Newhard Company applies overhead cost to jobs on the basis of 113% of direct labor cost. Job 313 includes 1,800 units and its job cost sheet contains 37,248 in direct materials and 10,400 in direct labor. Required: a. What is the total manufacturing cost applied to Job 313? b. What is this job's unit product cost?

Solution Steps

To solve this problem, we need to calculate two things:

a. The total manufacturing cost for Job 313, which includes direct materials, direct labor, and applied overhead. The overhead is calculated as 113% of the direct labor cost.

b. The unit product cost, which is the total manufacturing cost divided by the number of units produced.

The overhead cost is calculated as \( 113\% \) of the direct labor cost. Thus, we have:

\[ \text{Overhead Cost} = 1.13 \times 10,400 = 11,752.00 \]

The total manufacturing cost includes direct materials, direct labor, and the overhead cost. Therefore, we can express it as:

\[ \text{Total Manufacturing Cost} = \text{Direct Materials} + \text{Direct Labor} + \text{Overhead Cost} \]

Substituting the values:

\[ \text{Total Manufacturing Cost} = 37,248 + 10,400 + 11,752 = 59,400.00 \]

The unit product cost is determined by dividing the total manufacturing cost by the number of units produced:

\[ \text{Unit Product Cost} = \frac{\text{Total Manufacturing Cost}}{\text{Units Produced}} = \frac{59,400}{1,800} = 33.00 \]

Final Answer