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Boeing uses a job-order costing system. The company has the following data for Job #789: Direct materials: $1,200,000 Direct labor: 10,000 hours at $50/hour Manufacturing

Boeing uses a job-order costing system. The company has the following data for Job #789:

  • Direct materials: $1,200,000
  • Direct labor: 10,000 hours at $50/hour
  • Manufacturing overhead: Applied at 130% of direct labor cost

Additional costs for the month include:

  • Selling and Administrative Expenses: $150,000

Requirements:

  1. Compute the total manufacturing cost for Job #789.
  2. Determine the unit cost if 20 units were produced in Job #789.
  3. Prepare a job cost sheet.
  4. Calculate the gross margin if the job is sold for $3,500,000.
Analyze the impact of overhead application on the job cost.

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