Technology Accessories Inc. is a designer, manufacturer, and distributor of accessories for

consumer electronic products. Early in 20Y3, the company began production of a leather cover for tablet computers, called the iLeather. The cover is made of stitched leather with a velvet interior and fits around most tablet computers. In January, $750,000 was spent on developing marketing and advertising materials. For the first six months of 20Y2, the company spent $1,400,000 promoting the iLeather. The product was ready for manufac ture on January 21, 20Y3.

Technology Accessories Inc. uses a job order cost system to accumulate costs for the iLeather. Direct materials unit costs for the iLeather are as follows:

Leather $10.00 Velvet 5.00 Packaging 0.40

Total $15.40

The actual production process for the iLeather is fairly straightforward. First, leather is brought to a cutting and stitching machine. The machine cuts the leather and stitches an exterior edge into the product. The machine requires one hour per 125 iLeathers.

After the iLeather is cut and stitched, it is brought to assembly, where assembly per sonnel affix the velvet interior and pack the iLeather for shipping. The direct labor cost for this work is $0.50 per unit.

The completed packages are then sold to retail outlets through a sales force. The sales force is compensated by a 20% commission on the wholesale price for all sales.

Total completed production was 500,000 units during the year. Other information is as follows:

Number of iLeather units sold in 20Y3 460,000 Wholesale price per unit $40

Chapter 19 Job Order Costing 963 b. Factory overhead is applied to each job at a rate of 50% of direct labor cost.

c. The May 1 Work in Process balance consisted of two jobs, as follows:

Job No. Style

101 AF1 102 AF3 Total

Work in Process, May 1

$26,400 46,000

$72,400

d. Customer jobs completed and units sold in May were as follows:

Instructions

Job No. Style

101 AF1 102 AF3 103 AF2 104 VY1 105 VY2 106 AF4

Completed in May

X X

X X

Units Sold in May

264 360 0 384 530 0

1. Determine the missing amounts associated with each letter. Provide supporting calcula tions by completing a table with the following headings:

May 1 Job Work in No. Quantity Process

Direct Materials

Direct Labor

Factory Overhead

Total Unit Units Cost Cost Sold

Cost of Goods Sold