Discussion QuestionEpsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at $1,015,000, and they estimated total direct labor costs at $1,400,00o.The administration and selling overheads are to be absorbed in each job cost at 15% of productioncost. Distribution cost should be added to each job according to quotes from outside carriagecompanies.Thecompanywishes to quote for job # W5oo. Data for the job are as follows:Direct materials cost$169,450Direct labour cost$230,000Direct labour hours400 hoursSpecial Design CostDistribution quote from haulage companyUnits of product produced$12,300$17,930250 cratesa) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for2018.b) How much manufacturing overhead was allocated to Job #W5o0?c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied.d) How much was the production cost per unit (cost per crate) of finished product?

Name: Discussion QuestionEpsilon Manufacturing Company uses a predetermined
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Discussion QuestionEpsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at $1,015,000, and they estimated

Answer a) Predetermined manufacturing overhead rate =Estimated total manufacturing overhead…

Answered: Discussion Question Epsilon…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

Expert Solution

Step 1

Answer a)

$\begin{array}{rcl} P r e d e t e r m i n e d m a n u f a c t u r i n g o v e r h e a d r a t e & = & \frac{E s t i m a t e d t o t a l m a n u f a c t u r i n g o v e r h e a d \cos t s}{E s t i m a t e d D i r e c t a b o u r h o u r s} \\ = & \frac{$ 1, 015, 000}{1, 400, 000} \\ = & 72.50 % o f d i r e c t l a b o u r \cos t s \end{array}$

Answer b)

$\begin{array}{rcl} A l l o c a t e d m a n u f a c t u r i n g o v e r h e a d t o J o b # W 500 & = & D i r e c t l a b o u r \cos t s r e l a t e d t o J o b # W 500 \times 72.50 % \\ = & $ 230, 000 \times 72.50 % \\ = & $ 166750 \end{array}$

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions