Question
Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2018, they estimated total manufacturing overhead costs
Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2018, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor hours at 7,000. The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # 401. Job stats are as follows: Direct materials cost $173,250 Direct labour cost $240,000 Direct labour hours 500 hours Special Design Cost $8,750 Distribution quote from haulage company $21,700 Units of product produced 400 cartons a) Compute Miguels Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #401? c) Calculate the total cost & quotation price of Job #401, given that a margin of 25% is applied. d) How much was the production cost per unit (cost per carton) of finished product?
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