Question

The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was $2,118. A total of 40 direct labor-hours and 257 machine- hours were worked on the job. The direct labor wage rate is $18 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $22 per machine-hour. The total cost for the job on its job cost sheet would be: a. $8,492 b. $10,637 c. $5,867 d. $5,448 8. Parsons Corporation plans to sell 20,000 units during August. If the company has 6,500 units on hand at the start of the month, and plans to have 7,000 units on hand at end of the month, how many units must be produced during the month? a. 27,000 b. 20,500 c. 21,500 d. 19,500

I dont understand question 7 and 8 please help

Answer 1

Solution :
7	Computation of total Cost for the job 323 on its job cost sheet :
	Particulars	Amount
	Direct materials cost	$        2,118
	Add : Direct labor cost	$           720
	( 40 hours * $18 per hour )
	Add : Overhead cost	$        5,654
	( 257 hours * $22 per machine hour )
	Total cost of Job	$        8,492
	Therefore, ( a ) $ 8,492 is the correct answer.
8	Calculation of number of units required to produced during the month to sell 20,000 units
	Number of units required to produced   =	Sale + Closing stock - Opening Stock
	=	20,000 units + 7,000 units - 6,500 units
	=	20500
	Therefore, ( b ) $ 20,500 is the correct answer.