Homework answers / question archive / 4-29 Track the flow of costs in a job costing system

4-29 Track the flow of costs in a job costing system

Accounting

Share With

4-29 Track the flow of costs in a job costing system. Olga Ltd produces stapling machines for most businesses operating in New Orleans. The production process involves three stages: cutting department, assembly department and painting and finishing department. Each department is treated as a cost center. The management estimates that the total manufacturing overheads will be $136,000, allocated as follows: Cutting $56,000 Assembly $48,000 Painting and finishing $32,000 Total production in units for the period is estimated at 16,000 stapling machines. The budgeted materials and labor cost per stapling machine are: Direct materials $15.50 Direct labor: Cutting; 10 minutes @s6 per hour $ 1.00 Assembly: 1 hour 30 minutes @ $6 per hour $ 9.00 Painting and finishing: 20 minutes @$4.50 per hour $ 1.50 Total production cost per unit $27.00 Overhead is absorbed by machine hours (cutting departing), labor hours (assembly department), and per unit of production (painting and finishing department). Compute the total manufacturing cost for the total units produced.