Midwest Industries Ltd. produces several attachments to heavy equipment.

You are the controller hired into their bucket attachment division.

Buckets are generally custom made and are attached onto a variety of loaders.

The CFO wants to use one of these costing systems: Activity-based costing, job costing & process costing.

Also, should they use actual or budgeted costs.

The CFO is currently unsure what system is in use.

The CFO says that they have numerous departments and want everything to be priced appropriately

You find out the following-

The typical job for Midwest is large in nature and customizable. There is a basic shell design for each bucket, but bottom (tapered or flat), bucket size & material etc. can be customised

Costs are put as either direct or indirect/overhead or period within the specific manufacturing facility. The company uses FIFO for their direct materials.

Staff could track the overhead costs more specifically

* In the fall Midwest budgets all major costs

A typical job for Midwest looks like this:

Job B115

Sales Price $68,000

Direct Manufacturing Labour $15,.000

Direct Materials $24,000

Total Budgeted Manufacturing Overhead Costs$14,910,000

Direct budgeted Manufacturing Machine Hours 21,000

Actual Machine Hours Job B115 30 hours

Budgeted Machine Hours Job B115 32 hours

Required:

- A memo for the CFO regarding costing

-a summary calculation for the CFO for job B115 with job costing calculations