Question

Job Costs

At the end of August, Prichard Company had completed Jobs 40 and 42. Job 40 is for 200 units, and Job 42 is for 500 units.

The following data relate to these two jobs:

On August 4, raw materials were requisitioned for production as follows: 500 units for Job 40 at $18 per unit and 900 units for Job 42 at $14 per unit.

During August, Prichard Company accumulated 500 hours of direct labor costs on Job 40 and 1,200 hours on Job 42. The total direct labor was incurred at a rate of $16 per direct labor hour for Job 40 and $14 per direct labor hour for Job 42.

The predetermined factory overhead rate is $5.00 per direct labor hour.

a. Determine the balance on the job cost sheets for Jobs 40 and 42 at the end of August.

Job 40	$
Job 42	$

b. Determine the cost per unit for Jobs 40 and 42 at the end of August. If required, round your answers to the nearest cent.

Job 40	$
Job 42	$

Answer 1

Solution a:

Balance for Job 40 = Direct material + diract labor + factory overead applied

= (500*$18) + (500*$16) +(500*$5)

= $19,500

Balance for Job 42 = (900*$14) + (1200*$14) + (1200*$5)

= $35,400

Solutin b:

Cost per unit for Job 40 = $19500/ 200 = $97.50

Cost per unit for Job 42 = $35400 /500 = $70.80