*Baxter Bike Company uses job order costing for its brand new line of feather we

Question

*Baxter Bike Company uses job order costing for its brand new line of feather weight bikes. The cost incurred for production during 2014 totaled $18,000 of materials, $19,000 of direct labor costs, and $32,000 of manufacturing overhead applied. The company ships all products as soon as a batch of bikes is finished. It had no finished goods inventory on hand at the beginning or at the end of the year. Beginning work in process totaled $8,000, and the ending work in process was $15,000. During the year, the company completed 230 bikes. How much is the cost per bike?

A. $269.57

B. $400.00

C. $285.96

D. $268.15

Explanation / Answer

the cost per bike=cost incurred for production+Beginning work in process - the ending work in process/230 bikes=18,000+19,000+32,000+8,000-15,000/230 bikes=$62,000/230=$269.57

so A. $269.57

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