Question
In: Accounting
Newman Company's Job 1865 for the manufacture of 5,200 coats was completed during August at the...
Newman Company's Job 1865 for the manufacture of 5,200 coats was completed during August at the unit costs presented below. Due to an internal failure in the production process, 200 coats were found to be spoiled during final inspection that were sold to a jobber for $9,000. The following are Newman’s unit product costs: Direct materials $20 Direct labor $18 Factory overhead (excluding $1 allowance for spoilage costs) $18 What would be the unit cost of good coats produced on Job 1865?
Solutions
Expert Solution
| Particulars | Amount | |
| Direct Material | 20.00 | |
| Direct Labor | 18.00 | |
| Factory overhead | 18.00 | |
| Allowance for spoilage | 1.00 | |
| Total per unit cost | 57.00 | |
| Units produced | 5,400.00 | |
| Total Cost | 307,800.00 | (57*5400) |
| Less: Sale of spoiled coats | (9,000.00) | |
| Net Total Cost for 5200 coats | 298,800.00 | |
| Unit cost of good coat | 57.46 | (298800/5200) |
Hence, the unit cost of good coat is $57.46
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