Question

Job Costs

At the end of August, Kaye Company had completed Jobs 40 and 42. Job 40 is for 200 units, and Job 42 is for 2,000 units.

The following data relate to these two jobs:

On August 4, raw materials were requisitioned for production as follows: 700 units for Job 40 at $16 per unit and 900 units for Job 42 at $16 per unit.

During August, Kaye Company accumulated 200 hours of direct labor costs on Job 40 and 500 hours on Job 42. The total direct labor was incurred at a rate of $24 per direct labor hour for Job 40 and $14 per direct labor hour for Job 42.

The predetermined factory overhead rate is $12.00 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.

Job 40	Amount
Direct material (700 units X $16 per unit)	$11,200
Direct labor (200 hrs X $24 per hour)	4,800
Applied overhead (200 hrs X $12 per hour)	2,400
Total cost	$18,400

Job 42	Amount
Direct material (900 units X $16 per unit)	$14,400
Direct labor (500 hrs X $14 per hour)	7,000
Applied overhead (500 hrs X $12 per hour)	6,000
Total cost	$27,400

b.

==> Cost per unit for Job 40 = $18,400 / 200 units = $92 per unit.

==> Cost per unit for Job 42 = $27,400 / 2000 units = $13.7 per unit.