od od da ti n bo 1. Matthew Co. is a manufacturer of fashion garments. The company makes a variety of clothes, and obviously some (e.g., socks) are cheaper than others (e.g., jeans). Total overhead is budgeted to be $250,000 per month. The company applies overhead to products on the basis of direct labour hours. Budgeted labour hours are 5,000 per month. Required (a) What is the budgeted overhead recovery rate per direct labour hour? (b) How much overhead should be charged to a hoodie that takes six 006 minutes to make? (c) How much overhead should be charged to an overcoat that takes 1.5 hours to make? 2. Luke Inc. is a manufacturer of dairy products such as milk, cream, and yogurt. Manufacturing overhead is all fixed cost and is approximately $20,000 per month. Sales in recent months were 10,000 kg per month. If (the cost of the main ingredient (raw milk) is $0.50 per litre, what markup per kg of raw material should the company use to establish the full cost of its products? 3. Cane Co. had overhead of $750,000 and used 30,000 direct labour hours. Required (a) Calculate the overhead recovery rate per direct labour hour. (b) Is a labour-based overhead recovery rate a good choice for Cane Co.?