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    Total product cost for ABC Company

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    ABC Co produces three items: TV's, VCR's, and Stereos. They use a plant wide overhead rate based on machine hours. The following is available:

    Product TV's VCR's Stereos
    Units Produces 3000 2000 5000
    Machine Hrs (assembly) 1 3 2
    Machine Hours (packing) 1 1 1
    Direct Labor hrs (per unit) 2 2 2
    Direct Mat cost (per unit) $5.00 $45.00 $15.00

    Direct labor wage rate is flat $20/hour with no overtime incurred. Also, total OH costs are $380,000 for assembly and $200,000 for packing. Calculate total product cost per stereo.

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    https://brainmass.com/business/accounting/total-product-cost-abc-company-337731

    Solution Preview

    Total product cost consists of Direct Material, Direct Labor and Overhead
    Overhead is applied based on machine hours.
    We first calculate the predetermined overhead rate
    Predetermined overhead rate = Total ...

    Solution Summary

    The solution explains how to calculate the total product cost

    $2.19

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