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Metal Millers Co. manufacturers and sells machinery parts. The Company has four main, but differently made, products - bolts, router bits, benchtops, and aluminum framing.
Metal Millers Co. manufacturers and sells machinery parts. The Company has four main, but differently made, products - bolts, router bits, benchtops, and aluminum framing. The Company expects to make the following number of units for each product and expects the applicable overhead costs for each product as follows: Expected Expected Production Units Overhead Costs Bolts 150,000 60,000 Router Bits 10,000 20,000 Benchtops 1,200 7,200 Aluminum Framing 470 5,640G. Assume that instead of the Expected Overhead Costs originally noted, Overhead Costs are allocated to units based on two different labor-based activity bases: Welding and Fabrication. Overhead costs applied via welding are allocated to all units based on total per hour labor costs, while those of fabrication are allocated to all units based on the number of units assembled for the day. Estimate the total overhead costs for each product again when applying overheads costs using the following allocation methods. Welding ($) Welding Fabrication (Usage) ($) Bolts $0.20 per hour 100,000 hours $30 for every 100 units Router Bits $4 per hour 1,500 hours $15 for every 10 units Benchtops $60 per hour 60 hours $6 for every 2 units Aluminum Framing $30 per hour 10 hours $100 for every 10 unitsDirect Materials Direct Labor Costs Suggested Sales Cost Price Bolts $0.20 $0.55 $2.00 Router Bits $9.50 $25.50 $36.25 Benchtops $70.00 $100.00 $220.00 Aluminum Framing $60 $220 $520.00
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