Question
Leisure Industries manufactures custom-designed playground equipment for schools and city parks. Leisure expected to incur $906,400 of manufacturing overhead cost, 41,200 of direct labor hours,
Leisure Industries manufactures custom-designed playground equipment for schools and city parks. Leisure expected to incur $906,400 of manufacturing overhead cost, 41,200 of direct labor hours, and $988,800 of direct labor cost during the year (the cost of direct labor is $24 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During March, Leisure completed Job 304. The job used 175 direct labor hours and required $15,100 of direct materials. The City of Northville has contracted to purchase the playground equipment at a price of 24% over manufacturing cost.
1. Calculate the manufacturing cost of Job 304.
2. How much will the City of Northville pay for this playground equipment?
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