Job cost Ernie’s Electronics, Inc., delivered 1,000 custom-designed computer monitors to its...

Question

Job cost Ernie’s Electronics, Inc., delivered 1,000 custom-designed computer monitors to its customer, Video Shack. The following cost information was compiled in connection with this order:
Direct Materials Used
Part A327: 1 unit costing $60 per monitor
Part B149: 1 unit costing $120 per monitor
Direct Labor Used
Assembly: 6 hours per monitor at the rate of $10 per hour
Inspection: 1 hour per monitor at the rate of $12 per hour
In addition, the company applies manufacturing overhead costs to jobs at the rate of $5 per direct labor hour. The selling price for each monitor is $350.
Required
(a) Determine the total cost for this job.
(b) Determine the gross margin per monitor.

David · Accepted Answer

(a) Direct material Quantity Price Amount 
 Part A327 1,000 units $60 $60,000 
 Part B149 1,000 units 120 120,000 
 Total direct material cost   $180,000 
     
 Direct labor Hours Rate Amount 
 Assembly 6,000 $10 $60,000 
 Inspection 1,000 12 12,000 
 Total direct labor cost 7,000  $72,

Job cost Ernie’s Electronics, Inc., delivered 1,000 custom-designed computer monitors to its customer, Video Shack. The following cost information was compiled in connection with this order: Direct...

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