Crane Company uses job order costing for its brand new line of sewing machines.

Question

Crane Company uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2017 totaled $20000 of materials, $16000 of direct labor costs, and $13000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $22000, and the ending balance is $16000. During the year, the company completed 25 machines. How much is the cost per machine? $2200 $1960 $2840 $1720

Explanation / Answer

Calculate cost per machine :

so answer is a) $2200

Direct material 20000 Direct labour 16000 Manufacturing overhead applied 13000 Total manufacturing cost 49000 Beginning work in process 22000 Less: Ending work in process (16000) Cost of goods manufactured 55000 Machine completed 25 Cost per machine 2200

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