Solid Oak Bureau uses job costing. Solid Oak Bureau Company has two departments, Trimming and Finishing. Manufacturing overhead is allocated based on direct labor cost in the Trimming Department and direct labor hours in the Finishing Department. The following additional information is available: Actual data for completed Job No. 650 is as follows:
If Job No. 650 consists of 500 units of product, the average unit cost of this job is closest to

Question

Solid Oak Bureau uses job costing. Solid Oak Bureau Company has two departments, Trimming and Finishing. Manufacturing overhead is allocated based on direct labor cost in the Trimming Department and direct labor hours in the Finishing Department. The following additional information is available:  Actual data for completed Job No. 650 is as follows:
 If Job No. 650 consists of 500 units of product, the average unit cost of this job is closest to

Quizplus · Accepted Answer

To find the average unit cost, we need to determine the total cost of Job No. 650 and divide it by the 500 units produced.

Total direct materials cost = $21,000
Total direct labor cost in Trimming Department = $32,000
Trimming Department manufacturing overhead allocated based on direct labor = $32,000 x (75% / 100%) = $24,000
Total direct labor cost in Finishing Department = $18,000
Finishing Department manufacturing overhead allocated based on direct labor hours = $18,000 x (25% / 100%) = $4,500
Total manufacturing cost = $21,000 + $32,000 + $24,000 + $18,000 + $4,500 = $99,500

Average unit cost = $99,500 / 500 units = $199 per unit

Therefore, the closest average unit cost to $199 is $452.04, as calculated in choice A.

Solid Oak Bureau Uses Job Costing