JOB ORDER COST APPLICATION

The new dashboard order coded as Y328 of an auto spare part factory consists of 1,600 pieces to be delivered on December 25, 2009. Compute the unit sale price of dashboards with a profit of 60% on sale price.

Direct material (plastics) information for the new order (cost will be computed as low as possible):

1.12 Inventory 120 Kg 140 $/Kg

3.12 Purchase 200 Kg 150 $/Kg

8.12 Use 180 Kg

14.12 Purchase 400 Kg 160 $/Kg

18.12 Use 170 Kg

25.12 Purchase 250 Kg 170 $

28.12 Use 100 Kg

Direct Labor information for new order : 160 Hours X 120 $/Hours

Periodical manufacturing overheads :

Rent : 9.000 $/Month

Elektricity : 1.800 $/Month

Depreciation : 750 $/Month

Manufacturing process is realized in 2 production departments as Pressing and Grinding and 2 supporting departments as Maimtenance and Energy, cost drivers and data for the first allocation are given below:

Pressing Grinding Maintenance Energy

Rent (m²) 100 300 70 30

Elektricity (KwH) 4.000 1.000 800 200

Depreciation (DMH) 240 10 120 30

Reallocation information for step-down method are given below

Maintenance Hours

Pressing 90

Grinding 20

Maintenance Maintenance Hours 15

Energy KwH 10

Cost drivers needed for the absorption or from production departments to the cost objects are cost object quantities in Pressing Department where 8,000 pieces in total produced in the period and direct material quantities in Grinding Department where 7,300 Kg are used in total.