Question

Sheridan Company uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2019 totaled $15000 of materials, $11000 of direct labor costs, and $7000 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 $11000, and the ending balance is $8000. During the year, the company completed 25 machines. How much is the cost per machine?

Answer 1

$1,440 per machine

Step-by-step explanation:

The computation of the cost per machine is shown below:

= Total cost ÷ number of machine completed

where,

Total cost = Material cost + direct labor cost + manufacturing overhead applied cost + beginning work in process cost - ending work in process cost

= $15,000 + $11,000 + $7,000 + $11,000 - $8,000

= $36,000

And, the number of machine completed is 25

So, the cost per machine is

= $36,000 ÷ 25 machines

= $1,440 per machine