Mastery Problem: Job Order Costing

Purl of Great Price Company

Maria Young is the sole stockholder of Purl of Great Price Company $($POGP Company$),$ which produces high$-$end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters $($each of whom work $40$ hours per week$)$ and one office manager$/$knitting supervisor $($this employee works $20$ hours per week as office manager, and $20$ hours per week as knitting supervisor$).$ All wages are paid in cash at the end of each month.

Each knitter has a knitting machine that is used about $2/3$ of the knitter$$s time, the rest of the knitter$$s time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager$/$knitting supervisor approximately $5$ hours per week.

The knitting machines were purchased on January $1$ of the current year, and cost $$2,400$ each, with an anticipated useful life of $10$ years and no salvage value. The packaging machine was purchased on the same date and cost $$4,800,$ with the same anticipated useful life and salvage value