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Boeing Company manufactures aircraft using job costing. In January 2031, the company undertakes three aircraft contracts with the following costs: Contract X: Direct materials $500,000,
Boeing Company manufactures aircraft using job costing. In January 2031, the company undertakes three aircraft contracts with the following costs:
- Contract X: Direct materials $500,000, Direct labor $300,000, Factory overhead $200,000
- Contract Y: Direct materials $600,000, Direct labor $350,000, Factory overhead $250,000
- Contract Z: Direct materials $550,000, Direct labor $325,000, Factory overhead $225,000
Required:
- Calculate the total manufacturing costs for each contract.
- Allocate factory overhead to each contract using the predetermined overhead rate based on direct labor costs.
- Determine the cost per unit for each aircraft produced under each contract.
- Analyze the profitability of each contract based on job costing principles.
- Prepare a job costing statement for Boeing Company.
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