Question - Harrison Company makes two products and uses a conventional costing system in which a single plant-wide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:
Rascon Parcel
Direct materials cost per unit $ 13.00 $ 22.00
Direct labor cost per unit $ 6.00 $ 3.00
Direct labor-hours per unit 0.40 0.20
Number of units produced 20,000 80,000
These products are customized to some degree for specific customers.
Requirement 1: The company's manufacturing overhead costs for the year are expected to be $576,000. Using the-company's conventional costing system, compute the unit product costs for the two products.