Boston Manufacturing Company Had the Following Cost Information for May

question 37

Essay

Boston Manufacturing Company had the following cost information for May. $$\begin{array}{l}\text { Summary of Direct Materials Requisitions: }\\\begin{array} { c c c c } \hline \text { Department Number } & \text { Job Number } & \text { Quantity } & \text { Cost per Unit } \\1 & 88 \mathrm { X } & 6,650 & \$ 8.31 \\1 & 88 \mathrm { Y } & 2,130 & 2.52 \\1 & 88 \mathrm { Z } & 1,818 & 9.16 \\1 & 88 \mathrm { Y } & 921 & 4.18 \\1 & 88 \mathrm { Z } & 63 & 3.23\end{array}\end{array}$$ $$\begin{array}{l}\text { Summary of Direct Labor Time Tickets: }\\\begin{array} { c c r } \hline \text { Department Number } & \text { Job Number } & \text { Hours } \\\hline 1 & 88 \mathrm { X } & 554 \\2 & 88 \mathrm { Y } & 321 \\2 & 88 \mathrm { Z } & 618 \\1 & 88 \mathrm { Y } & 25 \\1 & 88 \mathrm { Z } & 613\end{array}\end{array}$$ The labor rate in Department 1 is $10.50 and in Department 2 is $9.50.The overhead rate in Department 1 is based on direct labor-hours, at $4.50 per hour; in Department 2 the rate is 125 percent of direct labor cost.Boston had no beginning work-in-process inventory for May.
Required: Calculate the direct materials, direct labor, factory overhead, and total costs for each job.

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Definitions:

Pricing

The process of determining the monetary value at which a good or service will be sold in the market.

Predatory Pricing

The practice of first setting prices low with the intention of pushing competitors out of the market or keeping new competitors from entering the market, and then raising prices to normal levels.

Lunch Special

A discounted or specially designed meal offered by restaurants during lunch hours to attract customers.

Markup Pricing

A pricing method in which a certain amount is added to the cost of the product, to set the final price; also called cost-plus pricing.