River Rafters produces angler kayaks. The company uses a job order costing syste

Question

River Rafters produces angler kayaks. The company uses a job order costing system. During the period, the company incurred the following costs to complete job #322: direct materials, $52,000 and direct labor, $37,000. The company also incurred $14,000 of administrative costs and $8,000 of selling costs to complete this job. Job #322 required 1,600 machine hours. Factory overhead was applied to the job at a rate of $25 per machine hour. If job #322 resulted in 150 kayaks, what was the cost of goods sold per kayak?

Explanation / Answer

Calculate cost of goods sold per kayak :

Direct material 52000 Direct labour 37000 Overhead applied (1600*25) 40000 Total cost of goods sold 129000 No of kayaks 150 Cost of goods sold per kayaks 860

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