The following data relate to a manufacturing department for a period:

Budgeted data for the coming year are as follows:

Direct labour hours 60,000 hours

Direct labour cost $110,000

Direct material cost $125,000

Production overhead $70,400

Actual data for the period are as follows:

Direct labour hours 55,500 hours

Direct labour cost $125,000

Direct material cost $150,000

Production overhead $67,800

Required:

(1) Calculate the production overhead absorption rate predetermined for the

period based on :

i.

Percentage of direct material cost;

ii.

Direct labour hours

(2) Two pieces of furniture are to be manufactured for customers. Direct

costs are as follows:

Job 123 Job 124 Direct material $15,400 $10,800 Direct labour 210 hours Dept. A @$16/ hour:160 hours Dept. B @20/hour

120 hours Dept. A @$12/hour; 100 hours Dept. B @$18/hour

100 hours Dept.A@$14/hour; 140 hours Dept.B@$10/hour

Selling and administrative overheads for each job are 10% of factory cost.

Required:

(b) Calculate the total costs of each job using all the two bases in question (1)

above. (c) If the firm quotes prices to customers that reflect a required profit of 25 per

cent on selling price, calculate the quoted selling price for each job