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3) CLEAN Clothing is a machine-intensive manufacturing company that produces clothes for many different retailers. The company recently finished working on an order from a
3) CLEAN Clothing is a machine-intensive manufacturing company that produces clothes for many different retailers. The company recently finished working on an order from a customer, which consisted of 50 blue colored jeans with specifications of a 32-inch waist and 32-inch length. The direct material and labor cost for this order is $6,000 and $3,200. Number of labor hours and machine hours spend on this job are 250 and 1,200 hours. At the beginning of the year, the company estimated that it would incur a total of $60,000 in manufacturing overhead costs, 2,500 direct labor hours, and 20,000 machine hours. The company uses predetermined overhead rates to apply overhead costs to production. a Calculate the predetermined overhead rate for the company using direct labor hours as an allocation base. b. Calculate the predetermined overhead rate for the company using machine hours as an allocation base. c. Calculate the total overhead cost that will be allocated to this job, using the predetermined overhead rates calculated in both part b and c. Based on Labor hours: Based on Machine hours: d. How much cost was allocated to this order using different methods of b and c. Based on Labor hours: Based on Machine hours
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