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31 October, 10:03

Coronado Industries uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2017 totaled $24000 of materials, $17000 of direct labor costs, and $14000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $23000, and the ending balance is $17000. During the year, the company completed 25 machines. How much is the cost per machine?

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  1. 31 October, 10:52
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    Cost per machine = $2,440 per machine

    Explanation:

    Provided Information

    Opening work in process = $23,000

    Additions during the month

    Direct Materials = $24,000

    Direct Labor = $17,000

    Manufacturing Overheads = $14,000

    Total during the month = $55,000

    Closing work in process = $17,000

    Cost of manufacturing during the month = Opening + Additions - Closing

    = $23,000 + $55,000 - $17,000 = $61,000

    Number of machines produced = 25 machines

    Cost per machine = $61,000 / 25 = $2,440 per machine
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