Question
Karger Company is to submit a bid on the production of 11,250 ceramic plates. It is estimated that the cost of materials will be Rs
Karger Company is to submit a bid on the production of 11,250 ceramic plates. It is estimated that the cost of materials will be Rs 13,000, and the cost of direct labor will be Rs 15,000. Factory overhead is applied at Rs 3.0 per direct labor hour in the Molding Department and at Rs 2.5 per direct labor hour in the Decorating Department. It is estimated that 1,000 direct labor hours at a cost of Rs 9,000 will be required in Molding. 500 direct labor hours are required in decorating department at a cost of Rs 6000
The company wishes a markup of 40% of its total production cost.
Required: Determine the following:
(1)Estimated Total Manufacturing cost.
(2)Explain which Manufacturing overhead (MOH)value would you use in (1) for the calculation, Actual or applied and why?
(3)What is the significance of using Budgeted MOH in Accounting system
(4)Estimated prime cost.
(5)Estimated conversion cost.
Bid price
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