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Blossom Hollow Resort has ordered 17 rotomolded kayaks from Current Designs. Each kayak will be formed in the rotomolded oven, ooled, and then have the
Blossom Hollow Resort has ordered 17 rotomolded kayaks from Current Designs. Each kayak will be formed in the rotomolded oven, ooled, and then have the excess plastic trimmed away. Then, the hatches, seat, ropes, and bungees will be attached to the kayak. Dave Thill, the kayak factory manager, knows that manufacturing each kayak requires 50 pounds of polyethylene powder and a inishing kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $ 1.40 per pound, and the finishing kits ost $ 166 each. Each kayak will use two kinds of labor: 2 hours of more-skilled type I labor from people who run the oven and trim the lastic, and 3 hours of less-skilled type Il labor from people who attach the hatches and seat and other hardware. The type I employees re paid $ 15 per hour, and the type Il employees are paid $ 12 per hour. For purposes of this problem, assume that overhead is applied o all jobs at a rate of 150% of direct labor costs. Determine the total cost of the Blossom Hollow order and the cost of each individual kayak in the order. Identify costs as direct naterials, direct labor, or manufacturing overhead. Direct Materials Polyethylene powder $ 70 Finishing kit 166 Direct labor More skilled 30 Less skilled 36 Manufacturing overhead 99 Total cost for one kayak $ Total cost of the order LA
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