Cullumber Hollow Resort has ordered 24 rotomolded kayaks from Current Designs. Each kayakwill be formed in the rotomoldedoven, cooled, and then have the excess plastic trimmed away. Then, thehatches, seat, ropes, and bungees will be attached to the kayak.Dave Thill, the kayak plant manager, knows that manufacturing each kayak requires 50 pounds of polyethylene powder and a finishingkit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.6 per pound, and the finishing kits cost $136each. Each kayak will use two kinds of labor: 2 hours of mẫre-skilled type I labor from people who run the oven and trim the plastic, and3 hours of less-skilled type II labor from people who attach the hatches and seat and other hardware. The type I employees are paid$14 per hour, and the type II employees are paid $12 per hour. For purposes of this problem, assume that overhead is applied to all jobsat a rate of 150% of direct labor costs.Determine the total cost of the Cullumber Hollow order and the cost of each individual kayak in the order. Identify costs as directmaterials, direct labor, or manufacturing overhead. Direct MaterialsPolyethylene powderFinishing kitDirect laborMore skilledLess skilledManufacturing overheadTotal cost for one kayakTotal cost of the order$LAGA

Introduction:- Total cost includes all costs relating to the cost of production, which includes both…

Answered: Determine the total cost of the…

Determine the total cost of the Cullumber Hollow order and the cost of each individual kayak in the order. Identify costs as direct materials, direct labor, or manufacturing overhead.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

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Cullumber Hollow Resort has ordered 24 rotomolded kayaks from Current Designs. Each kayakwill be formed in the rotomolded
oven, cooled, and then have the excess plastic trimmed away. Then, thehatches, seat, ropes, and bungees will be attached to the kayak.
Dave Thill, the kayak plant manager, knows that manufacturing each kayak requires 50 pounds of polyethylene powder and a finishing
kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.6 per pound, and the finishing kits cost $136
each. Each kayak will use two kinds of labor: 2 hours of mẫre-skilled type I labor from people who run the oven and trim the plastic, and
3 hours of less-skilled type II labor from people who attach the hatches and seat and other hardware. The type I employees are paid
$14 per hour, and the type II employees are paid $12 per hour. For purposes of this problem, assume that overhead is applied to all jobs
at a rate of 150% of direct labor costs.
Determine the total cost of the Cullumber Hollow order and the cost of each individual kayak in the order. Identify costs as direct
materials, direct labor, or manufacturing overhead.

Direct Materials
Polyethylene powder
Finishing kit
Direct labor
More skilled
Less skilled
Manufacturing overhead
Total cost for one kayak
Total cost of the order
$
LA
GA

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