Manufacturing overhead-multiple application bases
Response to the following problem:
Eddie Lander Tie Co. manufactures neckties and scarves. Two overhead application bases are used; some overhead is applied on the basis of raw material cost at a rate of 120% of material cost, and the balance of the overhead is applied at the rate of $8 per direct labor hour. Required: Calculate the cost per unit of a production run of 1,800 neckties that required raw materials costing $6,620 and 200 direct labor hours at a total cost of $2,240.