Principles of Managerial Accounting · free preview
Computing the Cost of a Job
The total cost of a job is direct materials plus direct labor plus applied overhead, and dividing by units produced yields unit cost, the number that supports pricing, quoting, and profitability analysis.
1. Assembling the job cost sheet
Assembling the job cost sheet
2. Unit cost from job totals
Unit cost from job totals
3. The quote decision
The quote decision
4. Comparing job profitability
Comparing job profitability
5. Job total assembly
A job consumes 2,400 dollars of materials, 3,000 dollars of labor, and 1,800 dollars of applied overhead. Compute total job cost.
6. Unit cost computation
Total job cost is 7,200 dollars for 60 units. Compute unit cost.
7. Markup pricing
Unit cost is 120 dollars and the pricing policy adds a 40 percent markup on cost. Compute the quoted price per unit.
8. Quote decision evidence
A prospective job estimates 24,000 dollars total cost for 200 units, and the customer will pay 110 dollars per unit. What does job costing reveal?
9. Applied overhead in totals
Applied overhead equals the predetermined rate times the job's actual allocation base ____. One word.
10. Gross margin computation
A job bills 10,800 dollars at a cost of 7,200 dollars. Compute gross margin in dollars, number only.
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