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Job 4 carries materials of $2,300, factory labor of $1,860 and 25 machine hours applied at $30 per machine hour. What is the cost of Job 4?
A$4,160
B$5,410
C$4,435
D$4,910
Answer & Solution
Correct answer: D. $4,910
1. Every job carries a materials cost, a factory labor cost and applied factory overhead.
2. Overhead on Job 4 is 25 machine hours times $30 per machine hour, which is $750.
3. Total job cost is $2,300 plus $1,860 plus $750, which is $4,910.
4. Job 4 is unfinished, so this $4,910 stays in Work in Process at the end of the period.
5. $4,160 omits applied overhead and counts only the two traceable costs.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 2.2 Comprehensive Example of Job Order Costing Transactions for a Manufacturing Company_
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