Question

1. The company uses a job-order costing system. How would you recommend that manufacturing overhead cost be assigned to production?

2. Recompute the company's unit product costs in accordance with your recommendations in (1) above.

Direct Materials........... $240,000
Direct Labor............... 128,000
Manufacturing Overhead..... 300,000
Total Manufacturing costs.. $668,000

Number of units to be produced... 80,000
Estimated unit product cost...... $8.35