Alltime Industries manufactures custom-designed playground equipment for schools and city parks. Alltime expected to incur $828,000 of manufacturing overhead cost, 41,400 of direct labor hours, and $1,573,200 of direct labor cost during the year (the cost of direct labor is $38 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During July, Alltime completed Job 302. The job used 170 direct labor hours and required $13,300 of direct materials. The City of Northville has contracted to purchase the playground equipment at a price of 24% over manufacturing cost. Read the requirements. Requirement 1. Calculate the manufacturing cost of Job 302. First identify the formula, then calculate the predetermined overhead rate. Estimated yearly overhead costs + Estimated yearly direct labor hours = Predetermined overhead rate 828,000 41,400 = $ per hour $ Calculate the manufacturing cost of Job 302. Direct labor Direct materials $ + 6,460 13,300 3,400 23,160 Manufacturing overhead Total job cost Requirement 2. How much will the City of Northville pay for this playground equipment? (Round your answers to the nearest whole number.) Total job cost Total price to charge 23,160 + ... = = 20
Alltime Industries manufactures custom-designed playground equipment for schools and city parks. Alltime expected to incur $828,000 of manufacturing overhead cost, 41,400 of direct labor hours, and $1,573,200 of direct labor cost during the year (the cost of direct labor is $38 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During July, Alltime completed Job 302. The job used 170 direct labor hours and required $13,300 of direct materials. The City of Northville has contracted to purchase the playground equipment at a price of 24% over manufacturing cost. Read the requirements. Requirement 1. Calculate the manufacturing cost of Job 302. First identify the formula, then calculate the predetermined overhead rate. Estimated yearly overhead costs + Estimated yearly direct labor hours = Predetermined overhead rate 828,000 41,400 = $ per hour $ Calculate the manufacturing cost of Job 302. Direct labor Direct materials $ + 6,460 13,300 3,400 23,160 Manufacturing overhead Total job cost Requirement 2. How much will the City of Northville pay for this playground equipment? (Round your answers to the nearest whole number.) Total job cost Total price to charge 23,160 + ... = = 20
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Alltime Industries manufactures custom-designed playground equipment for schools and city parks. Alltime expected to incur $828,000 of manufacturing overhead cost, 41,400 of direct labor hours,
and $1,573,200 of direct labor cost during the year (the cost of direct labor is $38 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During July, Alltime
completed Job 302. The job used 170 direct labor hours and required $13,300 of direct materials. The City of Northville has contracted to purchase the playground equipment at a price of 24% over
manufacturing cost.
Read the requirements.
Requirement 1. Calculate the manufacturing cost of Job 302.
First identify the formula, then calculate the predetermined overhead rate.
Estimated yearly overhead costs
Estimated yearly direct labor hours
41,400
$
828,000
$
Calculate the manufacturing cost of Job 302.
Direct labor
$
Direct materials
$
+
+
+
+
6,460
13,300
3,400
Manufacturing overhead
Total job cost
Requirement 2. How much will the City of Northville pay for this playground equipment? (Round your answers to the nearest whole number.)
Total job cost
Total price to charge
23,160
23,160
C...
=
= Predetermined overhead rate
= $
per hour
20
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