Question
Tel Corp. has the following estimated costs for 2020: Direct materials $160,000 Direct labour $2,000,000 Rent on factory building $150,000 Sales salaries $250,000 D
Tel Corp. has the following estimated costs for 2020: Direct materials $160,000 Direct labour $2,000,000 Rent on factory building $150,000 Sales salaries $250,000 D Depreciation on factory equipment $80,000 Indirect labour $120,000 Production supervisor's salary $150,000 Machine hours 40,000 Other data:: Ted Corp. estimates that 20,000 direct labour hours will be worked during the year. Assume that manufacturing overhead is applied on the basis of machine hours and Job XY120 is completed during the year. Instructions: a. Calculate the overhead rate per machine hour. 4 marks b. Calculate the rate of direct labour per hour. 2 marks c. Calculate the total cost of a job that will take 200 machine hours, $15,000 in direct materials, and 50 direct labour hours using a normal cost system, 4 marks
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