Colwell Recycling recycles newsprint, cardboard, and so forth, into recycled packaging materials. For the coming year, Colwell estimates total manufacturing overhead to be $359,640. The company's managers are not sure if direct labor hours (estimated to be 9,990)or machine hours (estimated to be 17,982 hours) is the best allocation base to use for allocating manufacturing overhead. Colwell bids for jobs using a 31% markup over total manufacturing cost.

After the new fiscal year began, Mills Paper Supply asked Colwell Recycling to bid for a job that will take 1,995 machine hours and 1,600 direct labor hours to produce. The direct labor cost for this job will be $10 per hour, and the direct materials will total $25,100. Read the requirements

Requirements:

Compute the total job cost and bid price if

Colwell

Recycling decided to use direct labor hours as the manufacturing overhead allocation base for the year.

2.

Compute the total job cost and bid price if

Colwell

Recycling decided to use machine hours as the manufacturing overhead allocation base for the year.

3.

In addition to the bid from

Colwell

Recycling,

Mills Paper Supply

received a bid of

$124,500

for this job from

Harris Recycling.

What are the ramifications for

Colwell

Recycling?.

Requirement 1. Compute the total job cost and bid price if Colwell Recycling decided to use direct labor hours as the manufacturing overhead allocation base for the year. First calculate the predetermined overhead rate based on direct labor hours. Identify the formula and then compute the rate. Next we will calculate the total job cost. Requirement 1. Compute the total job cost and bid price if Colwell Recycling decided to use direct labor hours as the manufacturing overhead allocation base for the year. First calculate the predetermined overhead rate based on direct labor hours. Identify the formula and then compute the rate. Next we will calculate the total job cost