Requirement 1. Compute the totaljob cost and bid price Olney 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. Estimated yearly overhead costs Estimated yearly direct labor hours Predetermined overhead rate 5 370,000 10,000 ES 37 per hour Next we will calculate the total job cost Job Sheet Direct materials 5 25.400 Direct inber 18.150 Manufacturing overhead 61,050 $ 104.000 Totaljob.cost Compute the bid price money decided to use direct labor hours as the manufacturing overhead allocation base for the year. (Round at amounts to the nearest whole dollar) Job cool Markup for prodit 104.000 32426 137,020 Bid price Requirement 2. Compute the total job cost and bid price Olney Recycling decided to use machine hours as the manufacturing overhead allocation base for the year Calculate the predetermined overhead rate based on machine hours. Identify the formula and then compute the rate Eimated yearly overhead Estimated yearly machine hours Predetermined overhead rate 370,000 14,800 25 per hour Next we will calculate the total job cost. Job Sheet Direct materials 25,400 Direct labor 18,150 Manufacturing overhead 50.500 04.050 Total job cost Compute the bid price foney decided to use machine hours as the manufacturing overhead allocation base for the year. (Round all amounts to the nearest Whole Solar Job coat Markup for profit Bid price 04.050 20.154 $ 123.206 29 5 94,050 Requirements. In addition to the bid from Olney Recycling, Lottwich Paper Supely received a bit of $126.000 for his job from Drund Recycling What are the ramifications to Oy Recycling? Whether or not Ciney wins the bid will depend on the allocation are the company chose to use during the year. Olney 137.026 the company uses direct labor hours as the location base in case the company will probably the job to Drund Recycling, we stud was $126.000 However. One will probably the bid machine hours is used as the location base Using machine hours as an allocation base for in a bid price of 5 123.20 lo win Olney Recycling recycles newsprint, cardboard, and so forth, into recycled packaging materials. For the coming year, Olney 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. Olney bids for jobs using a 31% markup over total manufacturing cost. After the new fiscal year began, Leftwich Paper Supply asked Olney Recycling to bid for a job that will take 2,020 machine hours and 1,650 direct labor hours to produce. The direct labor cost for this job will be $11 per hour, and the direct materials will total $25,400. n. GEORGE