Rental of equipment for job 303A will amount to $35 275.

Additional Information:

Eastern Enterprises recovers selling, distribution and administrative overheads at a rate of 20% of production costs and profit is based on a margin of 20%.

A. Compute overhead absorption rates for each department.

B. Calculate the cost of Job 303A, clearly showing expected profit and selling price.

Eastern Enterprises has three departments; Welding, Assembly and Spraying. Welding calculates its predetermined overhead absorption rate based on machine hours; Assembly is based on direct labour hours while Spraying is based on direct labour cost. On 2021 January 01, the company had the following estimates: The labour rate is $150 per hour for all departments. Job 303A which was started and completed during the year showed the following