Figure 5 - 1 The Nautical Corporation manufactures custom-made wood wall units. The following data pertains to Job X4A:
Factory overhead rate is $22.50 per machine hour. Job X4A consists of 500 units.
Refer to Figure 5-1. One-half of Job X4A was sold for $10,000. What is the total amount of costs assigned to Job X4A?

Question

Figure 5 - 1 The Nautical Corporation manufactures custom-made wood wall units. The following data pertains to Job X4A:
 Factory overhead rate is $22.50 per machine hour. Job X4A consists of 500 units.
Refer to Figure 5-1. One-half of Job X4A was sold for $10,000. What is the total amount of costs assigned to Job X4A?

Quizplus · Accepted Answer

The total amount of costs assigned to Job X4A can be calculated as follows: 
- Direct materials cost for 500 units: $7,500 ($15 per unit x 500 units)
- Direct labor cost for 500 units: $10,000 ($20 per unit x 500 units)
- Factory overhead cost for 500 units: $5,625 ($22.50 per machine hour x 250 machine hours)
- Total cost for 500 units: $23,125
Since only one-half of Job X4A was sold for $10,000, the total cost assigned to Job X4A would be $23,125 x 2 = $46,250. Therefore, the correct answer is B ($15,750, which is half of $31,500 - the total cost allocated to Job X4A).

Figure 5 - 1 the Nautical Corporation Manufactures Custom-Made Wood