Question:
During June, Assembly Department no. 4 of Hot Tech produced 15,000 model 201 computer keyboards. Assembly of these units required 1,875 hours of direct labor at a cost of $45,500, direct materials costing $121,000, and 400 hours of machine time. Based on an analysis of overhead costs at the beginning of the year, overhead is applied to keyboards using the following formula: Overhead = 120% of Direct Labor Cost + $350 per Machine Hour
A. Compute the total amount of overhead cost applied to the 15,000 keyboards.
B. Compute the per-unit cost of manufacturing these keyboards.