Hello,
I need some help with trying to figure out how to calculate the overhead cost per unit. I have computed the Activity rate as well as the overhead applied for both products. The following is the info provided:

Product / Direct Labor hours / annual prod. / total direct labor hours
XR7 0.4DLHs per unit 16,000.00 units 6,400 DLHs
ZDS 0.6 DLHs per unit 36,000.0 units 21,600 DLHs
Total 28,000 DLHS
Product XR7 direct materials per unit $44, ZD5 $28
Direct Labor rate $60 per hour

The company always uses direct labor-hours as the base for applying manu. Overhaed cost to products. Manu overhead totals $1,947,400 per year.

Actvity Cost Pool Activity Measure Est total Cost XR7 ZDS Total
Machine setup No# of setups $151,800 132 88 220
Special Mining machine hours 275,600 1,060 0 1,060
General Factory Direct labor-hours 1,520,000 3,800 15,200 19,000

I beilieve I am to divide the manu overhead cost with the production units but it is not coming out right. Thanks for your help:)

You would divide the total overhead costs applied by the units produced.

However, I can't check why you aren't coming up with the right answer because you haven't shown any of your work or you answers. (There's also both traditional and activity based shown here and you'd have to do both.)

The predetermined overhead rate is 70.00 per DLH. I am having problems calculating the total unit procduct cost. I added the direct material with the direct labor plus the manu overhead and it is not coming out right. Thanks

Please just show me your work. I'm not going to do it for you. And I can't check what you're doing wrong if you don't show it to me.

I pulled this out of your other thread. PLEASE keep the same problem together so we don't have to go chasing everything all over.

This is correct for the activity based portion of it.

The work I have done:
Predetermined rate 1,947,400/ 28,000.00= 69.55 rounded to $70.00
Activity Cost Pool / Acitivity Rate
Machine Setup 151,800/220= 690
Special Mining 275,600/1060= 260
General Factory 1,520,000/19,000= 80



Model xr7
Activity Cost pool / Overhead Applied
Machine Setup 690*132= 91,080.00
Special miling 260*1060=275,600
General factory 80*3,800.00= 304,000.00
Total manu overhead= 670,680.00

Model ZD5
Activity Cost Pool / Overhead Applied
Machine setup 690*88= 60,720.00
Special miling 260*0= 0
General factory 80*15,200= 1,216,000
Total manu overhead = 1,276,720

I know that the calculation are right but i cannot get the total unit product cost from this or the overhead cost per unit. Thanks for working with me I take a online class.

I would not round that 69.55 to $70. In fact, it's a good idea to take these out to 3 or 4 decimal places if the numbers ever come out that way. Once you start multiplying back out, that rounding can make huge differences in your final answers. You didn't actually apply anything based on that rate, but if you had, your total would've been $13,000 off using $70 instead of $69.55.

(Unless of course you've been specifically instructed to round a particular way.)

Anyway, your total applied overhead costs are correct. I already told you that. You said in your first post that you thought getting the per unit cost would be to take the overhead and divide by units produced. I already confirmed that is correct. And then asked to see this work of why it wasn't coming out correctly. You still haven't shown me that particular work.

Since you've got the correct applied overhead and the units, I'm sure it's just some little thing. (You aren't trying to add them together I hope.)