At the end of April, Almerinda Company had completed Jobs 50 and 51. Job 50 is f

Question

At the end of April, Almerinda Company had completed Jobs 50 and 51. Job 50 is for 23,040 units, and Job 51 is for 26,000 units. The following data relate to these two jobs: On April 6, Almerinda Company purchased on account 60,000 units of raw materials at $12 per unit. On April 21, raw materials were requisitioned for production as follows: 25,000 units for Job 50 at $10 per unit and 27,000 units for Job 51 at $12 per unit. During April, Almerinda Company accumulated 20,000 hours of direct labor costs on Job 50 and 24,000 hours on Job 51. The total direct labor was incurred at a rate of $20.00 per direct labor hour for Job 50 and $22.00 per direct labor hour for Job 51. Almerinda Company estimates that total factory overhead costs will be $1,750,000 for the year. Direct labor hours are estimated to be 500,000. Determine the balance on the job cost sheets for Jobs 50 and 51 at the end of April. Job 50 $ Job 51 $ Determine the cost per unit for Jobs 50 and 51 at the end of April. If required, round your answers to two decimal places. Job 50 $ Job 51 $Job 50 $ Job 51 $ Determine the cost per unit for Jobs 50 and 51 at the end of April. If required, round your answers to two decimal places. Job 50 $ Job 51

Explanation / Answer

Note: Overhead Recovery rate = Total Overheads / No. of direct labour hours

= $1750000 / 500000

= $3.5 per Direct labour hour

Overheads absorbed by Job 50 = $3.5 x 20000 = $70000

Overheads absorbed by Job 51 = $3.5 x 24000 = $84000

Solution:

Job 50 Job 51 Materials 25000 x 10 = $250000 27000 x 12 = $324000 Labour 20000 x 20 = $400000 24000 x 22 = $528000 Overheads $70000 $84000 Total Costs $720000 $936000 No. of units 23040 26000 Cost per unit $31.25 $36

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