12-14: Flower City Cartridges (FCC) manufactures replacement cartridges for desk

Question

12-14: Flower City Cartridges (FCC) manufactures replacement cartridges for desktop printers. FCC uses standard costs within a job order cost system. In June, FCC purchased 18 gallons of blue ink for $385.20 and produced the following four different cartridge jobs using the blue ink (and other inks, materials, and direct labor): Jobs Blue Ink, Gallons used CJ120 4.2 HP9X2 3.9 CN417 3.8 XRX776 4.4 All four labor jobs have a blue ink materials standard that calls for four gallons of blue ink per job. Blue ink has a standard cost of $20.00 per gallon. These were the only jobs calling for blue ink in June. There was no beginning blue ink inventory on June 1. Required: prepare a table that indicates the financial disposition of the historical cost of the blue ink purchased in June. (That is, account for the $385.20 blue ink purchase)

Explanation / Answer

Assuming All the 4 inks have same cost, cost per gallon = $385.20/18= $19.26 So, The table should be as follows CJ120 = 4.2 * $19.26 = $80.89 HP9X2 = 3.9 * $19.26 = $75.11 CN417 = 3.8* $19.26 = $73.19 XRX776 = 4.4* $19.26 = $84.74 Remaining, Blue Ink = 1.7 * $19.26 = $32.74

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