Recycling recycles newsprint, cardboard, and so forth, into recycled packaging materials. For the coming year, estimates total manufacturing overhead to be . The company's managers are not sure if direct labor hours (estimated to be ) or machine hours (estimated to be hours) is the best allocation base to use for allocating manufacturing overhead. bids for jobs using a % markup over total manufacturing cost.

. Epstein Recycling recycles newsprint, cardboard, and so forth, into recycled packaging materials. For the coming year, Epstein estimates total manufacturing overhead to be $370,000. The company's managers are not sure if direct labor hours (estimated to be 10,000) or machine hours (estimated to be 14,800 hours) is the best allocation base to use for allocating manufacturing overhead. Epstein bids for jobs using a 31% markup over total manufacturing cost. After the new fiscal year began, Lundy Paper Supply asked Epstein Recycling to bid for a job that will take 2,020 machine hours and 1,600 direct labor hours to produce. The direct labor cost for this job will be $10 per hour, and the direct materials will total $25,000. Read the requirements. Requirement 1. Compute the total job cost and bid price if Epstein Recycling decided to use direct labor hours as the manufacturing overhead allocation base for the year. First calculate the predetermined overhead rate based on direct labor hours. Identify the formula and then compute the rate. = Predetermined overhead rate