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Tik Tok Company manufactures customized coffee tables. The following relates to Job No. X10, an order...

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.

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Answer #1

a) Total Manufacturing cost for Job X10.

Direct Material = $22,800

Direct labour = $9,600 (600*$16)

Factory Overhead = $12,000 (400*$30)

Total Manufacturing Cost = $44,400 ($22,800+$9,600+$12,000)

b) Cost for coffe table for Jon X10

Cost for coffe table = Total Manufacturing cost/ no of coffee tables.

Cost for coffee Table = $296 ($44,400/150)

c) Uses of Unit cost Information

Unit costing is also known as single costing

1) Unit cost system will be used to analyse the profitability of the particular product.

For ex: If the unit sale price is 50 & Cost is 40, then we can analyse the data efficiently if we have cost per unit.

2)It provides traceful information to identify wastages, Losses & Inefficiencies.

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