Question

The Nautical Corporation manufactures custom-made wood wall units. The following data pertains to Job X4A: Direct materials placed into production $9,000 Direct labor hours worked 300 hours Direct labor rate per hour $15 Machine hours worked 100 hours Factory overhead rate is $22.50 per machine hour. Job X4A consists of 500 units. One-half of Job X4A was sold for $10,000. What is the total amount of costs assigned to Job X4A

Answer 1

Answer:

Total Cost of Job X4A:                                             $

Direct material cost  ($9,000 x 500 units)              4,500,000                              

Direct labour cost (300 hrs x $15 x 500 units )       2,250,000

Overhead applied (100 hrs x $22.50 x 500 units)  1,125,000

Total cost                                                                    7,875,000

Explanation:

The total cost of Job X4A is the aggregate of direct material cost, direct labour cost and overhead applied. Overhead is absorbed on the basis of machine hours. Thus, we will multiply the overhead rate by machine hours and number of units produced.