Reference no: EM132804554

Canyon City Co. uses a job order costing system that combines actualdirect material and actual direct labor costs with a predetermined overhead charge based on machine hours. Expected overhead and machine hours of $1,421,000 and 145,000, respectively, were used in developing the predetermined rate for 2013.

During 2013, the company worked on Job #876 and incurred the following costs and machine hours:

Direct material $47,500
Direct labor 21,800
Machine hours 325

Problem a. What is the cost per unit if 1,500 units were made? Round your answer to the nearest cent.

Problem b. In completing Job #876, 30 units were defective and had to be reworked at a cost of $25 each. Assume that spoilage and rework costs were included in the original estimated overhead costs. Where does the $750 rework cost appear in the accounts of Canyon City Co.?

Problem c. Disregard the facts in (b). Upon completing Job #876, the quality control inspector determined that 30 units were spoiled and would be unacceptable to the customer. Thirty additional good units were made at a total cost of $1,390. The spoiled units were sold for $240 as "seconds" to an outlet store. What is the total cost of Job #876?