EXERCISE 25 Computing Total Job Costs and Unit Product Costs

EXERCISE 2-5 Computing Total Job Costs and Unit Product Costs Using Multiple Predetermined Rates LO2-4 Finishing and Fabrication are $18.00 per direct labor-hour and i 10% of direct materials cost, respectively. The labor wage rate is $16.00 per hour. The following information pertains to Job 700: Finishing Fabrication Direct materials $410 $60 Direct labor $128 $48 Required: 1. What is the total manufacturing cost assigned to Job 700?

Solution

CALCULATION OF THE TOTAL MANUFACTURING COST Particulrs FININSHING FABRICATION Direct Materials $                                  410 $                              60 Direct Labours $                                  128 $                              48 ($ 128 / 16 = 8 Hours) ($ 48 / 16 = 3 Hours) Prime Cost (A) $                                  538 $                           108 Add: Overhead Cost 110% of Material Cost (B) $                                  451 $                              66 (110% of $ 410) (110% of $ 60) For Direct Labours (C)= $                                  144 $                              54 (8 Hours X $ 18) (3 Hours X $ 18) Total (A + b+c) $                              1,133 $                           228 Total Cost of Job 700 = total Cost of Fininshing + Total Cost pf Fabrcation Total Cost of Job 700 = $ 1133 + $ 228 = $                              1,361