Question
Vesbra Inc. has the following budgeted manufacturing overheads for the year, based on normal activity levels: Department Budgeted Overheads Overheads Absorption Base $ Machining 2
Vesbra Inc. has the following budgeted manufacturing overheads for the year, based on normal activity levels: Department Budgeted Overheads Overheads Absorption Base $ Machining 2 450 000 10 000 machine hours Assembly 3 456 000 9 000 Labour hours Finishing 3 200 000 8 000 Labour hours Vesbra Inc. is asked to provide information, for JOB DLW420, in relation to the supply of a replacement motor for a standby generator at a factory located in Portmore. The motor will need to be passed through the machining department, the assembly department, and the finishing department. JOB DLW420 incurred the following cost. Material required will be: i. Iron 280 kg at $52.50 per kg ii. Zinc 195 kg at $36.80 per kg iii. Copper 210 kg at $30.00 kg Direct labour required will be: i. Machining department 80 hours at $450 per hour ii. Assembly department 336 hours at $360 per hour iii. Finishing department 184 hours at $280 per hour The profit margin is 25 % A. Calculate the overhead absorption rate for each production department (3 marks) B. Prepare the job cost sheet for Vesbra Inc, (13 marks) C. Calculate the Quotation cost for the job (4 marks)
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