Epstein Recycling recycles newsprint, cardboard, and so forth, into recycled packaging After the new fiscal year began, Leftwich Paper Supply asked Epstein Recycling to bid for materials. For the coming year, Epstein estimates total manufacturing overhead to be $370,000. The company's managers are not sure if direct labor hours (estimated to be 10,000) or machine hours (estimated to be 14,800 hours) is the best allocation base to use $25,600 for allocating manufacturing overhead. Epstein bids for jobs using a 31% markup over total manufacturing cost. a job that will take 1,995 machine hours and 1,750 direct labor hours to produce. The direct labor cost for this job will be $10 per hour, and the direct materials will total Read the requirements. Requirement 1. Compute the total job cost and bid price if Epstein 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 Predetermined overhead rate - per hour Next we will calculate the total job cost. Job Sheet Next Module: Week-5, 11-19-18 to 11-26-18 Total job cost Compute the bid price if Epstein decided to use direct labor hours as the manufacturing overhead allocation base for the year. (Round all amounts to the nearest whole dollar.) Bid price Requirement 2. Compute the total job cost and bid price if Epstein Recycling decided to use machine hours as the manufacturing overhead allocation base for the year. Calculate the predetermined overhead rate based on machine hours. ldentify the formula and then compute the rate - Predetermined overhead rate per hour Next we will calculate the total job cost. Job Sheet Next Module: Week-5, 11-19-18 to 11-26-18 Total job cost Compute the bid price if Epstein decided to use machine hours as the manufacturing overhead allocation base for the year. (Round all amounts to the nearest whole dollar.) Bid price Requirement 3. In addition to the bid from Epstein Recycling, Leftwich Paper Supply received a bid of $124,000 for this job from Mauzy Recycling. What are the ramifications for Epstein Recycling? Whether or not Epstein wins the bid will depend on the allocation base the company chose to use during the year. Epstein's bid price will be S will probably will probably base results in a bid price of $ if the company uses direct labor hours as the allocation base. In this case, the company the job to Mauzy Recycling, since its bid was $ the bid if machine hours is used as the allocation base. Using machine hours as an allocation However, Epstein
