Rising Sun, Inc. produces granola that requires two processes, mixing and baking, to complete. The best-selling type of granola is cherry almond delight. Information related to the 100,000 units of cherry almond delight produced annually is shown in the following table:Direct materials$230,000Direct labor? Mixing Department (600 DLH x $24 per DLH)$14,400 Baking Department (400 DLH x $22 per DLH)$8,800Machine hours? Mixing Department200 MH Baking Department 300 MHRising Sun's total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on machine hours in the mixing department and direct labor hours in the baking department.?Mixing DepartmentBaking DepartmentDirect labor hours11,000 DLH5,000 DLHMachine
hours4,000 MH3,000 MHManufacturing overhead costs $80,000$12,500Determine the total product cost of this product line and each unit of cherry almond delight.
What will be an ideal response?
Mixing Dept. overhead: $80,000/4,000 MH = $20 per MH
$20 per MH × 200 MH = $4,000 for cherry almond product line
Baking Dept. overhead: $12,500/5,000 DLH = $2.50 per DLH
$2.50 per DLH × 400 DLH = $1,000 for cherry almond product line
| ? | Total Product Line 100,000 Units | Per Unit |
| Direct materials | $230,000 | $230,000/100,000 units = $2.30 per unit |
| Direct labor | $14,400 + $8,800 = $23,200 | $23,200/100,000 units = $0.232 per unit |
| Overhead | $4,000 + $1,000 = $5,000 | $5,000/100,000 units = $0.05 per unit |
| Total | $258,200 | $2.582 per unit |
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