The Mahoney Company has two producing departments: Assembly and Finishing. The company has been using a plantwide predetermined overhead rate based on direct labor hours. The following estimates were made for the current year:
Assembly Finishing Total
Manufacturing overhead $200,000 $100,000 $300,000
Direct labor hours 40,000 35,000 75,000
Machine hours 5,000 16,000 21,000
Mahoney stated and completed Job 1512 during the year. The job-order cost sheet indicated the following:
Materials requisitioned $18,000
Direct labor cost 16,000
Direct labor hours
Assembly 1700 hours
Finishing 1300 hours
Machine hours:
Assembly 1,000 hours
Finishing 700 hours
A total of 2,000 units were produced on Job 1512
Required: a. Assume that Mahoney uses a plantwide predetermined overhead rate based on direct labor hours. Calculate the total cost and the unit cost for each of the 2,000 units produced by Job 1512.
b. Assume that Mahoney uses separate departmental overhead rates based upon direct labor hours for Assembly and upon machine hours for Finishing. Calculate the total cost and the unit cost for each of the 2,000 units produced by Job 1512.