Question

At the beginning of the year, Roach Company expected to incur $54,000 of overhead costs in producing 6,000 units of product. The direct material cost is $20 per unit of product. Direct labor cost is $30 per unit. During January, 500 units were produced.
The total cost of the units made in January was:

A) $29,500 B) $25,000 C) $4,500 D) None of these

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Roach Company expected to incur $54,000 of overhead costs in producing 6,000 units of product. The direct material cost is $20 per unit of product. The direct labor cost is $30 per unit. During January, 500 units were produced.

First, we need to calculate the unitary overhead cost:

Unitary overhead= 54,000/6,000= $9

Total cost= direct material + direct labor + allocated overhead

Total cost= 500*20 + 500*30 + 500*9= $29,500