A company produces batches of 1,500 units. Each batch requires 60 machine hours. The overhead is applied at a rate of $30 per machine hour. If the direct materials cost $3,000 and the direct labor costs $2,700 per batch, what is the total cost of the batch and the cost per unit?Question 17Answera.Total cost: $7,500, Cost per unit: $5b.Total cost: $7,200, Cost per unit: $4.80c.Total cost: $6,000, Cost per unit: $4d.Total cost: $6,500, Cost per unit: $4.33
Question
A company produces batches of 1,500 units. Each batch requires 60 machine hours. The overhead is applied at a rate of 3,000 and the direct labor costs 7,500, Cost per unit: 7,200, Cost per unit: 6,000, Cost per unit: 6,500, Cost per unit: $4.33
Solution
First, let's calculate the overhead cost. The overhead is applied at a rate of 1,800.
Next, we add the overhead cost to the direct materials cost and the direct labor cost to get the total cost of the batch. So, the total cost is 1,800 (overhead cost) + 3,000 (direct materials cost) + 2,700 (direct labor cost) = $7,500.
Finally, to find the cost per unit, we divide the total cost of the batch by the number of units in the batch. So, the cost per unit is 7,500 / 1,500 = $5.
So, the total cost of the batch is 5. Therefore, the answer is a. Total cost: 5.
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