Quicker Company Uses a Job Order Costing System

question 30

Essay

Quicker Company uses a job order costing system. On May 1, Quicker Company's Work in Process Inventory account shows a beginning balance of $161,000. Production activity for May was as follows: Materials costing $91,000, along with operating supplies of $18,000, were requisitioned into production. Quicker Company's total payroll was $316,000, of which $77,000 was indirect labor. Overhead is applied at a rate of 120 percent of direct labor cost. Quicker's Cost of Goods Sold for the month of May was $692,000. Finished Goods Inventory was $71,500 on May 1 and $84,000 on May 31. (Quicker does not close out overhead accounts until year-end.)
a. Calculate Quicker's cost of goods completed for May.
b. Calculate Quicker's work in process ending inventory (May 31).
c. One of the jobs that was started in May, Job 266, was completed in June. Job 266 was 200 special-order lamps. The following costs had been applied to Job 266 as of June 1: direct materials, $1,400; direct labor, $1,800; overhead, $2,160. In June, $580 in direct materials cost and $900 of direct labor cost were added to complete Job 266. What was the cost per unit for Job 266? (Show your computations.)

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Definitions:

Competencies Clusters

Groups of related abilities, commitments, knowledge, and skills that enable a person or an organization to act effectively in job or situation.

Human Resource Management

A strategic approach to the effective management of people in an organization, focusing on policies and systems to maximize employee performance.

Technical

Relates to the skills, equipment, and processes required to design, manufacture, or operate products or services.

Sustainability

The ability to maintain or improve resources or processes in a way that does not deplete the underlying environmental, social, or economic systems.