Question

Jones company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for job #420 listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost of job #420 is ______.

Answer 1

Based on the information given the unit cost of job #420 is $2.00 per unit.

Unit cost

First step:

Total cost of Job #420= Direct materials + Direct Labor + Over head (Predetermined overhead rate x Direct labor costs)

Total cost of Job #420= $4,000 + $5,000 + 1.20 x $5,000

Total cost of Job #420= $4,000 + $5,000 +$6,000

Total cost of Job #420= $15,000

Second step:

Unit product cost=Total cost of Job #420/Units

Unit product cost = $15,000/7,500 units

Unit product cost= $2.00 per unit

Inconclusion  the unit cost of job #420 is $2.00 per unit.

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