1. The Smart Company is located in Toronto, Ontario, Canada. The company has been in business for 10 years. The Smart Company considers machine hours to be the best activity base for its manufacturing overhead. The estimate of overhead costs for the year for all jobs was $320,000. For Job #20, the company used 500 hours of machine hour processing. The actual overhead costs for the year totalled $325,000. The budgeted machine hours for the year were estimated at 20,000.

Provide your answer for the following (show all calculations):

a) The amount of overhead that should be applied to Job# 20.

b) If Job #20 had a Direct Material cost of $20,000, and Direct Labour included 10 factory workers that earned $20 per hour, working 8 hours per day, 5 days per week, for 2 weeks, calculate the total manufacturing cost for Job #20.

c) Explain why it is important to know the cost of the jobs completed.