Total Product Cost and Per-Unit Product Cost Slapshot Company makes ice hockey sticks. Last week, direct materials (wood, paint, Kevlar, and resin) costing $32,000 were put into production. Direct labor of $28,000 (10 workers x 200 hours x $14 per hour) was incurred. Manufacturing overhead equaled $60,000. By the end of the week, the company had manufactured 500 hockey sticks. Required: 1. Calculate the total product cost for last week. $ 2. Calculate the per-unit cost of one hockey stick that was produced last week.

Total product cost for last week = $120,000

Unit cost per hockey = $240

Explanation:

Total product cost is the sum of direct material cost, direct labour and overhead

Direct material cost is the costs of all specific materials required to product a product. For example, wood, paint for making chairs.

Direct labour : the cost of the man hours used directly for the purpose of production. wages of carpenters working on the chairs. It is arrived as active hours used for production * wage rate per hour.

Overhead : Sum of the indirect costs. indirect costs. These include expenditures on materials, labour and expenses incurred not specifically for a particular product. Examples are, cost of detergent for cleaning the toilets, salaries of the accountant, rent of the factory, e. t. c.

Total product cost for last week

= $32,000 + $28,0000 + $60,000 = $120,000

Cost per product = Total product cost / units produced

Unit cost per hockey = $120,000/500 = $240