Tik Tok Company manufactures customized coffee tables. The following relates to Job No. X10, an order for 150 coffee tables: Direct materials used $22 800 Direct labour hours worked 600 Direct labour rate per hour $16.00 Machine hours used 400 Applied factory overhead rate per machine hour $30.00 Required: a) What is the total manufacturing cost for Job No. X10? b) Calculate the cost per coffee table for Job No. X10? c) List two uses of this unit cost information to the managers at Tik Tok Company.
a)
Direct material used in Manufacturing |
$22,800 |
Direct Labour Cost (600 * 16) |
$9,600 |
Manufacturing overheads (400 * 30) |
$12,000 |
Total Manufacturing Cost (Job No. X10) |
$44,400 |
b)
Total Manufacturing Cost (Job No. X10) |
$44,400 |
Number of Coffee table |
150 |
Cost per coffee table for Job No. X10 (44,400 / 150) |
$296 |
c)
Two uses of this unit cost are:
1. Determination of selling price after calculating Mark-ups. |
2. Determination of process improvement initiatives by analysing different cost heads. |
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