Question
Everlast Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2020, they estimated total
Everlast Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2020, they estimated total manufacturing overhead costs at $1,203,750, and they estimated total direct labor costs at $1,500,000. The administration and selling overheads are to be absorbed in each job cost at 33% of prime cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for Job # B4000. Data for the job are as follows: Direct materials cost $159,500 Direct labour cost $240,000 Direct labour hours 400 hours Special Design Cost $12,850 Distribution quote from haulage company $17,900 a) Compute Everlast Manufacturing Company predetermined manufacturing overhead rate for 2020. b) Determine how much manufacturing overhead was allocated to Job #B4000? c) Calculate the total cost & quotation price of Job #B4000, given that a margin of 20% is applied. d) Given that Job #4000 consisted of 250 units, determine the production cost per unit?
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