Ernies Electronics, Inc., delivered 1,000 custom-designed computer monitors to its customer, Video Shack. The following cost information
Question:
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.
Step by Step Answer:
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young