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 $1,015,000, 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 $12,300 $17,930 Units of product produced 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W50o? 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?
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 $1,015,000, 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 $12,300 $17,930 Units of product produced 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W50o? 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?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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