Helppp China Trade, Inc., manufactures custom-made stuffed animals. Last month t

Question

Helppp

China Trade, Inc., manufactures custom-made stuffed animals. Last month the company produced 500 stuffed pandas for the local zoo to sell at a fund-raising event. Using job order costing, determine the product unit cost of a stuffed panda based on the following costs incurred during the month: manufacturing utilities, $200; depreciation on manufacturing equipment, $250; indirect materials, $150; direct materials, $1,000; indirect labor, $400; direct labor, $1,200; sales commissions, $3,000; president’s salary, $4,000; insurance on manufacturing plant, $300; advertising expense, $500; rent on manufacturing plant, $2,500; rent on sales office, $4,000; and legal expense, $250. How to compute per unit cost of a production?

Explanation / Answer

Calculate cost per unit of production :

Direct material 1000 Direct labour 1200 Manufacturing overhead manufacturing utilities 200 depreciation on manufacturing equipment 250 indirect materials 150 indirect labor 400 insurance on manufacturing plant 300 rent on manufacturing plant 2500 Total manufacturing overhead 3800 Total manufacturing cost 6000 Units produced 500 Cost per unit of production 12 per unit

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