Question 8 Product Costing

The Brunswick Bike Company, manufactures custom made mountain bikes. It uses an estimated rate for allocating factory overhead to job orders based on machine hours for the machining department and on a direct labour cost basis for the finishing department. The company budgeted the following for last year: Machining Finishing Manufacturing overhead $8,000,000 $5,000,000 Machine hours 250,000 14,D00 Direct labour hours 15,000 16 000 Direct labour cost $225,000 $2,400,000 During December, the cost record for job 602 shows the following: Machining Finishing Direct material requisitioned $7,000 $2,D00 Direct labour cost $300 $6 750 Direct labour hours 20 300 Machine hours 35 S Required: 1. What is the estimated overhead allocation rate that should be used in the machining department? In the finishing department? [5 marks] 2. What is the total overhead allocated to job 602? Provide your answer to 2 decimal points. [5 marks] 3. Assuming that job 602 consisted of 80 units (80 bikes), what is the unit cost for this job to the nearest dollar? [10 marks]