I'm asked to calculate the product cost.

GIVEN:

Direct Material - $300

Direct Labor (20 hours at $15 per Hour) - $300

Manufacturing overhead (The predetermined rate is $24 per direct-labor hour) - $400

TOTAL = $1000

* Each model requires 20 hours of direct labor.

I have already calculated the departmental predetermined overhead rate. The departmental overhead rate is $30 and it is correct.

I just don't know what to do with it now....

What I did was $30 x 20 hours and that was $600. Then I did $600 + 300 + 300 = $1200. But that's wrong. Any suggestions?

Thanks ahead of time!