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: 400 units for Job 40 at $12 per unit and 900 units for Job 42 at $18 per unit.

During August, Prichard Company accumulated 200 hours of direct labor costs on Job 40 and 1,100 hours on Job 42. The total direct labor was incurred at a rate of $12 per direct labor hour for Job 40 and $16 per direct labor hour for Job 42.

The predetermined factory overhead rate is $14.00 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

a.

Direct materials of Job 40 = 400 units at $12 per unit

= 400 x 12

= $4,800

Direct labor of Job 40 = 200 direct labor hours at 12 per direct labor hour

= 200 x 12

= $2,400

Fixed overhead applied to Job 40 = Direct labor hours x Predetermined overhead rate

= 200 x 14

= $2,800

Cost Sheet (Job 40)
Direct materials	4,800
Direct labor	2,400
Fixed overhead applied	2,800
Total Cost	$10,000

Direct materials of Job 42 = 900 units at $18 per unit

= 900 x 18

= $16,200

Direct labor of Job 42 = 1,100 direct labor hours at 16 per direct labor hour

= 1,100 x 16

= $17,600

Fixed overhead applied to Job 42 = Direct labor hours x Predetermined overhead rate

= 1,100 x 14

= $15,400

Cost Sheet (Job 42)
Direct materials	16,200
Direct labor	17,600
Fixed overhead applied	15,400
Total Cost	$49,200

b.

cost per unit for Job 40 = Total cost/ Number of units

= 10,000/200

= $50 per unit

Cost per unit for Job 42 = Total cost/ Number of units

= 49,200/500

= $98.4 per unit