Question: Ernies Electronics, Inc., delivered 1,000 custom-designed computer monitors to its customer, Video Shack. The following cost information was compiled in connection with this order: Direct

Ernie’s Electronics, Inc., delivered 1,000 custom-designed computer monitors to its customer, Video Shack. The following cost information was compiled in connection with this order:

Direct Materials

Used Part A327: 1 unit costing $60 per monitor

Part B149: 1 unit costing $120 per monitor

Direct Labor Used

Assembly: 6 hours per monitor at the rate of $10 per hour

Inspection: 1 hour per monitor at the rate of $12 per hour

In addition, the company applies manufacturing overhead costs to jobs at the rate of $5 per direct labor hour. The selling price for each monitor is $350.

Required

(a) Determine the total cost for this job.

(b) Determine the gross margin per monitor.

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