1. Calculate the manufacturing cost of Job 309. 2. How much will the City of Adams pay for this playground equipment?
Job costing: It is a method of costing where in all the costs like direct material, direct labor and manufacturing overhead are accumulated to a particular job. This method is suitable for jobs where the work is to be performed according to the specifications of a customer and in separate batches.
Raw materials: It is the basic input required to manufacture the finished products. The raw materials are processed by incurring conversion costs and other overhead to convert them into finished products.
Direct labor: It is the cost of salaries and wages incurred directly to produce a product. This cost is incurred to convert the raw materials into finished product.
Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products. These costs are not directly related to the units manufactured. So they are allocated to the manufactured units based on estimated cost drivers.
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