Answer:
Total cost for Product A 69,180
Explanation:
The overhead is allocated on labor cost:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
We will distribute the overhead cost over the cost driver (DL cost) to get the overhead rate
overhead: 61,000
total labor cost: 19,000 + 31,000 = 50,000
61,000/50,000 = $1.22
Now this rate means for every dollar of labor, 1.22 of overhead is applied.
Product A cost
DM 27,000
DL 19,000
MO 19,000 x 1.22 = 23,180
Total cost 69,180
