VSZ Inc. is a small engineering manufacturer using two cost pools for manufacturing overhead costs

1) machine-hours to allocate manufacturing overhead costs supporting fabrication and assembly process and

2) direct labour costs are cost allocation base to allocate cleaning, and maintenance costs to the various jobs

contracted during the year.

The following estimates are provided for the coming year for the company and for the Oryx Farm order

Jobs

Oryz farm job

Direct materials

$220,000

$12,800

Direct Manufacturing Labour

$120,000

$19,500

Manufacturing overhead-fabrication & assembly

$ 450,000

Machine hours

150,000mh

1,700mh

Canteen and Maintenance costs

$240,000

a. For VSZ Inc. determine the annual overhead cost -allocation rates. (2p)

b. Determine the number of overhead costs allocated to the Oryz farm job. (2p]

c. Determine the estimated total manufacturing costs for the Oryz farm job. Does the more precise way exist to

determine the full cost of the job performed? Suggest at least 4 activities if you were manager and cost drivers for these

activity cost pools. (4p]

d) Determine the selling price of the order if the proft margin is 30% of the seling price (me.e. markup on the sales) [2p]