Answer :
The total production cost in January is $8,500,000.
To calculate the total production cost in January, we need to consider the direct materials cost, direct labor cost, and manufacturing overhead cost.
The direct materials cost is given as $20 per unit, and since 200,000 units of Product J-45Z were produced and sold, the total direct materials cost is
200,000 * $20 = $4,000,000.
The direct labor cost is calculated by multiplying the direct labor hours per unit (0.5 hr/unit) by the number of units produced (200,000 units).
This gives us 0.5 * 200,000 = 100,000 direct labor hours.
The manufacturing overhead cost is equal to 80% of the direct labor rate per unit.
Since the direct labor rate per unit is 0.5 hr/unit and the manufacturing overhead is 80% of that, the manufacturing overhead per unit is
0.5 * 0.8 = 0.4 hr/unit.
Therefore, the manufacturing overhead cost is
200,000 units * $10/unit = $2,000,000.
To find the total production cost, we add up the direct materials cost, direct labor cost, and manufacturing overhead cost:
$4,000,000 + $2,000,000 + $2,000,000 = $8,000,000.
Therefore, the correct answer is 3. $8,500,000.
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Final answer:
To calculate the total production cost in January, consider the direct materials cost, direct labor cost, and manufacturing overhead for each unit of Product J-45Z.
Explanation:
To calculate the total production cost in January, we need to consider the direct materials cost, direct labor cost, and manufacturing overhead for each unit of Product J-45Z.
1. Direct materials cost per unit = $20
2. Direct labor cost per unit = (0.5 hr/unit) * (direct labor rate per hour)
3. Manufacturing overhead per unit = (80% of direct labor rate per unit) = (80% of direct labor cost per unit)
4. Total production cost per unit = Direct materials cost per unit + Direct labor cost per unit + Manufacturing overhead per unit
5. Total production cost in January = Total production cost per unit * Number of units produced
Using the given information, we have:
Total production cost per unit = $20 + (0.5 hr/unit) * (direct labor rate per hour) + (80% of direct labor cost per unit)
Total production cost in January = ($20 + (0.5 hr/unit) * (direct labor rate per hour) + (80% of direct labor cost per unit)) * 200,000
