Jetison Industries makes batches of custom novelty items for companies to give away at career fairs. Job X24 for Xcel Corporation consists of 2,000 pens that light up inside the pen base when you write. In addition, the name and address of Xcel Corp. is printed on the pens. Direct material for these pens amount to $1,500; direct labor is $2,800; and manufacturing overhead is $1,600. Based on this information, what is the cost per pen for Job X24

$2.95

Explanation:

The cost per pen for job X24 is computed as;

= Total cost of pen / Total output

Total cost of pen = Direct material + Direct labor + Manufacturing over head

Given that;

Direct material = $1,500

Direct labor = $2,800

Manufacturing over head = $1,600

Total output = 2,000 pen

= $1,500 + $2,800 + $1,600

= $5,900 / 2,000

= $2.95

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