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TropiPlus Ltd. engages in various activities, including crafting expensive beach umbrellas. The company expects the following expenses for the upcoming month: $15,000 Depreciation of machinery
TropiPlus Ltd. engages in various activities, including crafting expensive beach umbrellas. The company expects the following expenses for the upcoming month: $15,000 Depreciation of machinery $22,500 Direct labour cost 1,500 hours Direct labour hours $90,000 Direct materials cost Heating, cooling and power power $22,000 $3,500 Indirect labour cost $3,750 Indirectmaterials 750 hours Machine hours 1,500 Materials handling cost $2,000 Other miscellaneous indirect production cost $16,000 Rent In response to a customer inquiry for a beach umbrella, the company anticipates that crafting this specific umbrella will demand 10 hours of direct labour and 20 square meters of umbrella fabric at a rate of $30 per square meter. The company's standard practice allocates overhead costs to each job based on direct labour hours. Required: (a) Calculate the direct costs of making the a beach umbrella (b) Calculate the total indirect costs of the company (c) Calculate the overhead recovery rate of the company. (d) Calculate the full (absorption) cost of making the umbrella (e) Determine the full cost of a beach umbrella if the company uses machine hours as the basis for charging overheads, and the company requires six machine hours for this job
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