Chapter 16, Problem 4MAD

Brady Furniture Company manufactures wooden oak furniture. The company employs a job cost system to trace manufacturing costs to jobs. Each job represents a batch of furniture of the same type. Information regarding direct materials on selected jobs throughout the year is as follows:

Dining tables are the most difficult furniture item in Brady’s catalog to manufacture. Thus, the most skilled employees are scheduled to make dining tables, unless they are required for other jobs.

1. a. Determine the material cost per unit for each job.
2. b. Use the January material cost per unit for each type of furniture as the base material cost. For each month and each type of furniture, determine the unit material cost as a percent of the base unit material cost. Round percent to one decimal place. Use the following table format:

1. c. Develop a line chart of the percent of unit material cost to the base unit material cost. Place the months on the horizontal axis and use three lines for the three different types of furniture.
2. d. Interpret the chart. What is happening to the dining tables?