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:

Predictable Variability

Variations in demand or supply that can be forecasted with a degree of accuracy based on historical data or patterns.

Common Components

These are parts or materials used in the manufacturing of multiple different products, helping to reduce inventory costs and simplify production processes.

Dual Facilities

refers to a strategy where a company operates two or more facilities, typically manufacturing plants or distribution centers, in different locations to better serve various markets or to enhance production capabilities.

Stable Output

The consistent production level of goods or services over a period, unaffected by fluctuations in demand.