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# Developing Unit Costs Using Normal Costing

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The Coastal Landscaping and Snow Removal company uses normal costing to assign overhead costs to the firm's various jobs. Labor is charged to jobs at \$25 per hour and for the upcoming winter session, overhead is estimated at \$200,000 for \$10,000 hours of activity.

A. Using normal costing, what would be the total charge for removing snow from a mall parking lot that took four hours to clear?
B. If actual overhead costs are \$215,000 and actual hours worked are 11,000, is overhead overapplied or underapplied?

##### Solution Summary

This solution explains how to cost a product, given various factors, in Excel.

##### Solution Preview

** Please see the attached Excel file for the complete solution **

1 Calculation of overhead Aplication Rates

Direct labor hours Budgeted overheads \$200,000
Budgeted Direct labor hours 10000
Overhead application rate per hour \$20

A Statement showing the total charge for removing snow from a mall parking lot.
Direct labor @ \$25 per hour for 4 hours. \$100
Overhead @\$20 per hour for 4 hours \$80
Total charge for removal of snow using normal costing. \$180

B ...

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