Susan is currently working on assembling some numbers for her client's cost accounting practices for the current year. The client is a factory that produces condiments including ketchup and mustard. They use traditional costing, and Susan would like to calculate total cost per unit. They have the following costs (same for both condiments): Direct Materials (DM), $87,444; Direct Labor (DL), $96,782; and their Manufacturing Overhead (MOH) will be 88% of their DL cost. They produced 42,760 units of ketchup and 53,990 units of mustard during the period. What is their total cost per unit for mustard?
A) $4.99
B) $5.20
C) $6.30
D) $6.57

Question

Quizplus · Accepted Answer

This question requires you to calculate total cost per unit for mustard under traditional costing which entails first calculating total product costs correctly. $4.99 (Choice A) correctly added together the DM of $87,444, DL of $96,782, and MOH of $85,168.16 ($96,782 × 0.88) for a total product cost of $269,394.16. Then, this number is divided by the total units of mustard (53,990) to arrive at the correct total cost per unit of mustard.

Susan Is Currently Working on Assembling Some Numbers for Her