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Kendall Ltd., a manufacturing firm, manufactures chain for the Sunny Motorcycle company. The company uses a normal job-order costing system. Currently they are using a
Kendall Ltd., a manufacturing firm, manufactures chain for the Sunny Motorcycle company. The company uses a normal job-order costing system. Currently they are using a plantwide overhead rate based on direct labour hours and are interested in understanding the impact of moving to a departmental overhead rate structure with Cutting and Finishing departments using direct labour hours and Machining department using machine hours. Management has provided the following data for its three departments for the coming year. Estimated overhead costs per department Cutting Machining Finishing $115,000 $275,000 $51,000 Estimated normal activity per department (direct labour hours) Cutting 8,500 Machining 27,500 Finishing 7,700 Estimated normal activity per department (machine hours) Machining 52,500 Management estimates costs and activities for a job, Job 1, and they need to provide a quote to their customer. The quote price includes a 30% mark up over the full manufacturing cost. Management estimates are noted below. Job 1 Direct materials $5,500 Direct labour cost $2,000 Direct labour hours Cutting 100 Machining 600 Finishing 300 Number of machine hours Machining 400 Using the above information to answer the following questions. Question 5 (1 point) Calculate the plantwide overhead rate. A Question 6 (1 point) Calculate the departmental overhead rate for the Cutting department. A Question 7 (1 point) Calculate the departmental overhead rate for the Machining department. A Question 8 (1 point) Calculate the departmental overhead rate for the Finishing department. A Question 9 (2 points) Using a plantwide overhead rate, calculate the total cost for Job 1. A Question 10 (2 points) Using departmental overhead rates, calculate the bid price for Job 1. A
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