Basic	Multi-Layer	Custom
Direct Material Costs per wedding cake type	$20	$35	$50
Direct Labor Hours per wedding cake type	3 hours	5 hours	7 hours
Number of cakes expected to be produced by wedding cake type	1500	1700	1000
Direct Labor Costs per hour per wedding cake type	$50/hour	$50/hour	$50/hour

Total estimated manufacturing overhead cost is $150,000.

1. Define and explain the purpose of a predetermined overhead rate that is applied in a job-order costing system.

2. Using the information given above, compute the predetermined manufacturing overhead rate based on total direct labor hours for Suncat Cake Shop. Show all calculations and clearly label your answer.

3. Using job-order costing, compute the total manufacturing overhead cost that is expected to be allocated to each product. Show all calculations and clearly label your answer.

1. Basic Wedding Cake

2. Multi-layer Wedding Cake

3. Custom Wedding Cake

4. Do you think the total overhead cost allocation between the three products is reasonable? Why or why

not?

5. Using job-order costing, compute the product cost for each product. Show all calculations and clearly label your answer.

1. Basic Wedding Cake

2. Multi-layer Wedding Cake

3. Custom Wedding Cake