Question

Job 412 was one of the many jobs started and completed during the year. The job required $9,500 in direct materials and 35 hours of direct labor time at a total direct labor cost of $10,400. If the job contained four units and the company billed at 70% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer

Answer 1

The appropriate answer is "$8,457,50".

Step-by-step explanation:

The given values are:

Direct material cost,

= $9,500

Direct labor cost,

= $10,400

Units completed in job 412,

= 4

Now,

The total cost for completion of job 412 will be:

=
`Direct \ materials \ cost + Direct \ labor \ costs`

On substituting the values, we get

=
`9,500 + 10,400`

=
`19,900` ($)

Unit produced cost will be:

=
`(19,900)/(4)`

=
`4,975` ($)

70% of unit produced cost will be the profit margin, then

=
`70 \ percent* 4,975`

=
`3,482.50` ($)

hence,

The price charged to the customer will be:

=
`Unit \ product \ cost + Profit \ margin`

On substituting the values, we get

=
`4,975 + 3,482.50`

=
`8,457,50` ($)