Question

Will rate you please solve this ASAP

1) A ski hat maufacturer that uses $60 per machine hour as its plantwide predetermined overhead rate for job order costing.

Direct Labor cost: $800

Direct materials cost: $600

For its Danger Mountain ski hat job, it used 18 machine hours and it produced 200 ski hats. What was the total cost of the job and the cost per ski hat?

Multiple Choice

• $1,460 total cost and $7.30 per ski hat.

• $1,418 total cost and $7.09 per ski hat.

• $2,480 total cost and $12.40 per ski hat.

• $1,400 total cost and $7.40 per ski hat.

2) A company using Process Costing shipped goods that had a cost of $4,000 to a customer who bought them for $7,000. Included in one of the two required journal entries would be a debit to:

Multiple Choice

• Finished Goods for $7,000

• Cost of Goods Sold for $4,000

• Sales for $4,000

• Sales for $7,000

Answer 1

1) The correct option is

• $2,480 total cost and $12.40 per ski hat.

2) Correct answer is

• Cost of Goods Sold for $4,000

Workings

1. Total cost = direct material + direct labor + manufacturing overheads

Direct materials cost = $600

Direct Labor cost = $800

Manufacturing overheads = predetermined overhead rate * machine hours = 60*18 = $1,080

Total manufacturing cost = 600+800+1080 = $2,480

Units produced = 200

Cost per unit = 2480/200 = $12.40

2. When goods are sold, the seller will book 2 journal entries:

Debit...Cash or Accounts Receivable.......$7,000

Credit...Sales..........$7,000

(for recognising sales)

Debit....Cost of Goods Sold........$4,000

Credit...Finished Goods............$4,000

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(for recognising cost of goods sold associated with the respective sales)