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12 March, 14:03

At the beginning of the year, Roach 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, 500 units were produced.

The total cost of the units made in January was:

A) $29,500 B) $25,000 C) $4,500 D) None of these

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  1. 12 March, 16:10
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    The correct answer is A.

    Explanation:

    Giving the following information:

    Roach 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. The direct labor cost is $30 per unit. During January, 500 units were produced.

    First, we need to calculate the unitary overhead cost:

    Unitary overhead = 54,000/6,000 = $9

    Total cost = direct material + direct labor + allocated overhead

    Total cost = 500*20 + 500*30 + 500*9 = $29,500
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