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At the beginning of the year, Rangle Company expected to incur $54,000 of overhead costs in producing 6,000 units of product. The direct material cost is $20 per unit of product. Direct labor cost is $30 per unit. During January, 600 units were produced. The total cost of the units made in January was:

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Answer:

$35,400

Explanation:

The total cost is the sum of the direct and indirect costs. The direct cost is made up of the direct material and direct labour costs. The indirect cost or overheads is a cost to be apportioned based on the estimated total for the year and the units produced during the period

Total direct cost for January = 600 ($20 + $30)

= $30,000

Total indirect cost for January = 600/6000 * $54,000

= $5,400

The total cost of the units made in January was

= $30,000 + $5,400

= $35,400

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