Question

Job Costs

At the end of August, Prichard 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: 300 units for Job 40 at $16 per unit and 1,000 units for Job 42 at $24 per unit.

During August, Prichard Company accumulated 600 hours of direct labor costs on Job 40 and 800 hours on Job 42. The total direct labor was incurred at a rate of $12 per direct labor hour for Job 40 and $18 per direct labor hour for Job 42.

The predetermined factory overhead rate is $9.00 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) balance on job cost sheets for JOB 40 and JOB 42.

particulars	JOB 40	JOB 42
Raw material requisition	4800 (300 units x $16)	24000 (1000 units x $24)
direct labour costs( given that 600 hours of direct labor costs on Job 40 and 800 hours on Job 42. direct labor was incurred at a rate of $12 per direct labor hour for Job 40 and $18 per direct labor hour for Job 42).	7200 (600hours x $12)	14400 (800hours x $18)
factory overheads (given that factory overhead rate is $9.00 per direct labor hour).	5400 ($9 x 600hours)	7200 ($9 x 800hours)
total cost	17,400	45,600

b) Cost per unit = total cost / no. of units produced.

PARTICULARS	JOB 40	JOB 42
TOTAL COST	17,400	45,600
UNITS PRODUCED IN AUGUST	200	2000
COST PER UNIT	$87 (17400/200)	$22.8 (45600/2000)

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