Question

London Ceramics makes custom ceramic tiles. During March, the company started and finished Job #266. Job #266 consists of 2,500 tiles; each tile sells for $10.00. The company's records show the following direct materials were requisitioned for Job #266.Basic terra cotta tiles: 2,500 unitsSpecialty paint: 5 quartsHigh gloss glaze: 4 quartsLabor time records show the following employees worked on Job #266:Alice Cooper: 18 hoursMatthew Kline: 20 hoursLondon Ceramics allocates manufacturing overhead at a rate of $27 per direct labor hour.A) Complete Job #266's job cost record below to calculate the unit cost of the job.Job cost per unit =Manufacturing Cost InformationCost DetailCost TotalDirect Materials: Basic Terra Cotta Tiles$4.00 per unit10,000.00 Specialty Paint$7.00 per quart35.00 High gloss glaze$12.00 per quart48.00Total Direct Materials CostDirect Labor: Cooper$25 per hour450 Kline$15 per hour300Total Direct LaborManufacturing OverheadTotal Job CostDM+DL+MOHNumber of UnitsJob Cost per UnitB) What is the gross profit per tile on Job #266?

Answer 1

Answer:

The gross profit per tile is 5.26 dollars.

Explanation:

Direct materials:

Terra Cotta Tiles: $4 each   x 2,500 tiles =            10,000

Specialty paint $7 per quart x 5 quart on Job #266= 35

High gloss glaze: $12 per quart x 4 quart on Job #266 = 48

Total Direct Materials: 10,083

Labor hours: (18 Alice + 20 Matthew) = 38 hours

Overhead: $27 per labor hour:

Applied overhead: 38 hours x $ 27 = 1,023

Labor cost: 450 Alice + 300 Matthew = 750

Total cost: Materials + overhead + labor

                     10,083 +      750      + 1,023 = 11,856

cost per tile = $ 11,856 cost / 2,500 tiles = $4.7424/ per tile

sales price per tile:  $10/ per tile

Gross profit: sales revenue - cost of good

10 - 4.7424 = 5.2576 = $5.26/per tile