Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on directlabor hours. At the beginning of 2018, they estimated total manufacturing overhead costs at$2,352,000, and they estimated total direct labor hours at 7,000. The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost.Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # 401. Job stats are as follows:Direct materials cost $173,250Direct labour cost $240,000Direct labour hours 500 hoursSpecial Design Cost $8,750Distribution quote from haulage company $21,700Units of product produced 400 cartons a) Compute Miguel’s Manufacturing Company predetermined manufacturing overhead rate for2018.b) How much manufacturing overhead was allocated to Job #401?c) Calculate the total cost & quotation price of Job #401, given that a margin of 25% is applied.d) How much was the production cost per unit (cost per carton) 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
Chapter5: Product And Service Costing: Job-order System
Section: Chapter Questions
Problem 17E: During August, Skyler Company worked on three jobs. Data relating to these three jobs follow:...
icon
Related questions
icon
Concept explainers
Topic Video
Question
100%

Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct
labor hours. At the beginning of 2018, they estimated total manufacturing overhead costs at
$2,352,000, and they estimated total direct labor hours at 7,000.


The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost.
Distribution cost should be added to each job according to quotes from outside carriage companies.


The company wishes to quote for job # 401. Job stats are as follows:
Direct materials cost $173,250
Direct labour cost $240,000
Direct labour hours 500 hours
Special Design Cost $8,750
Distribution quote from haulage company $21,700
Units of product produced 400 cartons


a) Compute Miguel’s Manufacturing Company predetermined manufacturing overhead rate for
2018.
b) How much manufacturing overhead was allocated to Job #401?
c) Calculate the total cost & quotation price of Job #401, given that a margin of 25% is applied.
d) How much was the production cost per unit (cost per carton) of finished product?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,