Question

Wildhorse Manufacturing uses job order costing for its production of MP3 players. The cost incurred for the current year for the production of the MP3 players totaled $23000 of materials, $17000 of direct labor costs, and $15000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $21000, and the ending balance is $17000. During the year the company completed production for 1000 MP3 players. What is the cost per unit for each MP3 player?

A. $51
B. $76
C. S59
D. S55

Answer 1

The cost per unit for each MP3 player is $55. Option D.

Step-by-step explanation:

The cost per unit for each MP3 player can be calculated by dividing the total cost incurred for the production of the MP3 players by the number of MP3 players produced.

Total cost incurred = Cost of materials + Direct labor costs + Manufacturing overhead applied

Total cost incurred = $23000 + $17000 + $15000 = $55,000

Number of MP3 players produced = 1000

Cost per unit = Total cost incurred / Number of MP3 players produced

Cost per unit = $55,000 / 1000 = $55

Therefore, the cost per unit for each MP3 player is $55, which is option D.