Using the data in the exhibits, determine the conversion cost of a 100-unit batch of BW-18beeswax candle, a months production of spare candles for inventory, and a months work done for other divisionsunder the present model, Brights first proposal, and his revised proposal.

The present mode = DLH * hours

the first proposed method = each departments DHL* departmental total cost hourly rate) total cost hourly rate = labor rate per hour +overhead per hour

revised method = each departments DHL* departmental total cost hourly rate) total cost hourly rate = labor rate per hour +overhead per hour the overhead per hour is calculated at normal volume

Exhibit 1: Calculation of Plantwide Labour and Overhead Hourly Rate for October Labour Dollars Hours Wick making $40,873 2,527 Wax melting 28,760 2,138 Molding 143,899 7,678 Custom work 61,137 3,712 Packing 218,638 15.357 Total labour 493,307 31,412 Overhead 824,492 Total labour and overhead 1,317,799 Hourly Rate = $1,317,799/31,412 = $41.95 per hour (= $15.70 labour + $26.25 overhead) Exhibit 2: Proposed Departmental Labour and Overhead Hourly Rates Labour Rate Overhead Total Cost Department per Hour per Hour per Hour Wick making $20.10 $23.53 $43.63 Wax melting 18.50 22.61 41.11 Molding 19.75 46.89 66.64 Custom work 23.10 30.36 53.46 Packing 15.00 15.89 30.89 Exhibit 3: Direct Labour Hour Distribution for Three MCT's Activities BW-18 Beeswax Spare Candles Work for Candles (per Batch for Inventory Other Divisions Department of 100) (per Month) (per Month) Wick making 8 hours 122 hours 270 hours Wax melting 5 hours 108 hours 216 hours Molding 23 hours 446 hours 863 hours Custom work Packing 14 hours Total 50 hours 676 hours 1,349 hours Exhibit 4: Departmental Overhead Rates Based on Normal Volume Normal Volume Normal Overhead Overhead Department (DLH) Cost* (per DLH) Wick making 2,500 $59,100 $23.64 Wax melting 2,400 51,750 21.56 Molding 8,000 369,000 46.13 Custom work 3.600 110,865 30.80 Packing 17.500 264.338 15.11 Total 34.000 855,053 25.15 * Estimated overhead cost if each department operates at its normal volume