Josie’s Copy Shop performs a variety of copy jobs for its customers. Job 123 takes 500 sheets of paper at $0.01 per sheet and 10 bindings at $0.25 per binding. It takes 10 minutes of labor and 15 minutes of machine time on the black and white copier, 15 minutes of labor and 20 minutes of machine time on the color copier, and 10 minutes of labor and 15 minutes of machine time on the binding machines. The following table contains the operating costs and overhead for the various machines.

REQUIRED:

a. Use direct labor hours to develop the rate for the machining time the job requires.

b. Using one plant-wide rate based on direct labor hours, develop a cost for Job 123.

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Josie's Copy Shop Block and White Copier Color Copier Binding Machine Nachine costs $60,000 $120,000 $24,000 Overhead $60,000 $75,000 $36,000 Direct labor hours 4,000 2,500 1,500 Nachine hours 6,000 6,000 3,000