Question

Ajob cost sheet of Sunland Company is given below. JOB NO. ITEM FOR 2.500 7/2 7/31 Manufacturing Overhead Date 7/10 12 15 22 24 27 31 Job Cost Sheet 469 Quantity White Lion Cages Date Requested Todd Company Date Completed Direct Direct Materials Labor $700 900 $400 300 1,700 1,500 500 $500 375 625 Cost of completed job: Direct materials Direct labor Manufacturing overhead Total cost Unit cost Answer the following questions. (a) What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?

Answer 1

Answer

For Todd Company

Period :- 7/2 to 7/31

Job No. 469 Quantity 2500 Item :- White Lion Cages

a) The Source Document for Direct Materials, Direct Labour and Manufacring Overhead Cost Assigned to this Job are as follows.

The Cost which is incurred to Produce the Total Quantity in a Month is the Source Document. Hence All cost incurred during the entire month is a cost for the product though it incurred at different dates.

therefore

Direct Material Cost = $700+$900+$1700+$1500 (incurred during respetive different dates i.e. 7/10, 12, 24 & 27)

= $4800

Direct Labour Cost = $400+$300+$500(incurred during respetive different dates i.e. 7/15,22,31 respectively)

= $1200

Manufacturing overhead Cost = $500+$375+$625(incurred during respetive different dates i.e. 7/15,22,31 respectiely)

= $1500

b) Manufacturing Overhead Rate :- It is calculated on the basis direct labour Cost basis.

= 1500/1200*100 (Total Manufacturing Overheads / Total Labour Cost X 100

=125%

c) The Total Cost and the Unit Cost of the Completed Job are determined in following Manner.

i) Total Cost = Direct Material Cost $4800 (as calculated above) + Direct Labour Cost $1200 (As calculated above)+ Manufacturing Overhead Cost $1500 (As calculated above)

= $7500

ii) Unit Cost of the Completed Job = Total Cos (i.e total material cost+ Total Labour Cost+Total Manufacturing Cost) / Total Number of Units Produced in the Month

= $7500/2500

=$3 per Unit.