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Manufacturing CostSimple Collar Jeweled CollaraDirect Materials Cost0.5010.00bDirect labor Cost3.507.00cOverhead 10.0020.00Total unit Cost$14.00$37.00aDirect Material per unit:$.50 per Simple Collar$10 per Jeweled CollarbDirect Labor$7 per hour for labor cost1/2 hour of labor required per simple collar1 hours of labor required per jeweled collar1/2 labor hour X $7 labor cost = $3.5 for one simple collar1 labor hours X $7 labor cost per hour = $7 for one jeweled collarcHow to calculate overhead per unit using direct labor hours as cost driver.c-1Predetermined overhead rate X Direct labor hours = Overhead CostProducts
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Predetermined overhead is $20 per labor hourTotal estimated overhead cost per month is $10,000Total expected units produced per month is 500$10,000/500= $20.00 overhead cost per labor hourc-2 Overhead Cost per labor hour X Direct Labor hours per unit = Overhead cost per unitSimple Collar: $20 X 1/2 hour = $10.00 per collarJeweled Collar$20 X 1 hour = $20.00 per collar
 
 
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