Answer a and b. Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at sı,015,000, and they estimated total direct labor costs at $1,400,000.The administration and selling overheads are to be absorbed in each job cost at 15% of productioncost. Distribution cost should be added to each job according to quotes from outside carriagecompanies.The company wishes to quote for job # W500. Data for the job are as follows:Direct materials cost$169.450Direct labour cost$230,000Direct labour hours400 hoursSpecial Design CostDistribution quote from haulage companyUnits of product produced$12,300$17,930250 cratesa) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for2018.b) How much manufacturing overhead was allocated to Job #W500?c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied.d) How much was the production cost per unit (cost per crate) of finished product?

Predetermined manufacturing overhead rate = Estimated Manufacturing overheadEstimated total direct…

Answered: a) Compute Epsilon Manufacturing…

a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500?

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Question

Answer a and b.

Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a
percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing
overhead costs at sı,015,000, and they estimated total direct labor costs at $1,400,000.
The administration and selling overheads are to be absorbed in each job cost at 15% of production
cost. Distribution cost should be added to each job according to quotes from outside carriage
companies.
The company wishes to quote for job # W500. Data for the job are as follows:
Direct materials cost
$169.450
Direct labour cost
$230,000
Direct labour hours
400 hours
Special Design Cost
Distribution quote from haulage company
Units of product produced
$12,300
$17,930
250 crates
a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for
2018.
b) How much manufacturing overhead was allocated to Job #W500?
c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied.
d) How much was the production cost per unit (cost per crate) of finished product?

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