Question

Analyze Antolini Enterprises' job costs Antolini Enterprises produces men's sports coats that are sold by popular department stores. Each retail order is treated as a job that accumulates materials, labor, and overhead costs for a batch of sports coats. Management has obtained data on the labor costs for four selected jobs over a six-month period. Each selected job represents a similar style and size of sports coat. The data are as follows: Direct Labor Direct Labor Rate Total Direct Count Hours per Hour Labor Cost Job 107 4.50 $14.00 $ 63.00 Job 125 14 7.00 14.00 98.00 Job 160 8.80 14.00 123.20 Job 192 3.20 16.00 51.20 a. Determine the direct labor cost per unit for each job. 16 Direct Labor Cost per Sports Coat Job 107 Job 125 $ 7.00 Job 160 Job 192 b. Based on the calculations above. Indicate which of these is correct. 1. The direct labor cost increased over the first three jobs, and this increase relates to increase in labor time and not increase in labor rates. 2. The direct labor cost decreased over the first three jobs, and this decrease relates to decrease in labor time and not decrease in labor rates. 3. The direct labor cost increased over the first two jobs, and this increase is due to the increase in labor rates. 4. The direct labor cost decreased for all jobs, and the decrease is due to the decrease in labor rates and decrease in labor time. c. Determine the direct labor hours per sports coat. Direct Labor Hours per Sports Coat

Answer 1

39 1) We will divide the total direct labor cost by the count to determine the direct labor cost per unit 42 Count (B) 10 Job No. Total Direct Labor Cost (A) Job 107 63.00 Job 125 98.00 Job 160 123.20 Job 192 Direct Labor Cost per Sports Coat (A/B) 6.30 7.00 7.70 14 16 51.20 6.40 45 46 47 48 B) 49 50 Answer 1) The direct labor cost increased over the first three jobs, and this increase relates to increase in labor time and not increase in labor rates. The direct labor hours per Sports Coat is calculated by dividing the total direct labor hours by the count Job No. Count (B) Job 107 Job 125 Job 160 Job 192 Total Direct Hours (A) 4.50 7.00 8.80 3.20 10 14 16 Direct Labor Cost per Sports Coat (A/B) 0.45 0.50 0.55 0.40 61 d) Answer 1) Though there was an increase in the labor cost, the overall increase in the per unit labor cost was not significant.This may be due to higher efficiency. 62