Bramble Sportswear manufactures a line of specialty T-shirts using a job order costing system. In March the company incurred the following costs to complete Job ICU2: direct materials, $13,700, and direct labor, $4,900. The company also incurred $1,250 of administrative costs and $5,400 of selling costs to complete this job. Job ICU2 required 810 machine hours. Factory overhead was applied to the job at a rate of $25 per machine hour.

If Job ICU2 resulted in 6,400 good shirts, what was the cost of goods sold per shirt?

Per Unit Cost of Goods Sold 6.07

Explanation:

The computation of the cost of goods sold per shirt is shown below:-

Direct Material                    $13,700

Direct labor                         $4,900

Factory Overhead applied $20,250

(810 × $25)

Total Production cost          $38,850

No of Units Per JOB ICU 2   6,400

Per Unit Cost of Goods Sold 6.07

Therefore the per unit cost of goods sold is 6.07 after dividing the No of Units Per JOB ICU 2 by Number of Units Per JOB ICU 2

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