Discussion Question Vintage Manufacturing uses a perpetual inventory system and predetermined manufacturing overhead rate based on direct labor cost. At the beginning of 2023, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor cost at $3,360,000. The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The entity wishes to quote for job # 242. Job stats are as follows: Direct materials cost Direct labour rate Direct labour hours $175,250 $480 per direct labour hour 500 hours Special Design Cost Distribution quote from haulage company Units of product produced $9,750 $24,250 250 cartons a) Compute Vintage Manufacturing predetermined manufacturing overhead rate for 2023. b) How much manufacturing overhead was allocated to Job #242? c) Calculate the total cost & quotation price of Job #242, given that a margin of 20% is applied. d) Calculate the production cost per unit (cost per carton) of finished product? e) Assuming that the quote was accepted by the customer, state the journal entries that would be necessary to record the production costs for Job#242.
Discussion Question Vintage Manufacturing uses a perpetual inventory system and predetermined manufacturing overhead rate based on direct labor cost. At the beginning of 2023, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor cost at $3,360,000. The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The entity wishes to quote for job # 242. Job stats are as follows: Direct materials cost Direct labour rate Direct labour hours $175,250 $480 per direct labour hour 500 hours Special Design Cost Distribution quote from haulage company Units of product produced $9,750 $24,250 250 cartons a) Compute Vintage Manufacturing predetermined manufacturing overhead rate for 2023. b) How much manufacturing overhead was allocated to Job #242? c) Calculate the total cost & quotation price of Job #242, given that a margin of 20% is applied. d) Calculate the production cost per unit (cost per carton) of finished product? e) Assuming that the quote was accepted by the customer, state the journal entries that would be necessary to record the production costs for Job#242.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Discussion Question
Vintage Manufacturing uses a perpetual inventory system and predetermined manufacturing
overhead rate based on direct labor cost. At the beginning of 2023, they estimated total
manufacturing overhead costs at $2,352,000, and they estimated total direct labor cost at
$3,360,000.
The administration and selling overheads are to be absorbed in each job cost at 15% of prime cost.
Distribution cost should be added to each job according to quotes from outside carriage companies.
The entity wishes to quote for job # 242. Job stats are as follows:
Direct materials cost
Direct labour rate
Direct labour hours
$175,250
$480 per direct labour hour
500 hours
Special Design Cost
Distribution quote from haulage company
Units of product produced
$9,750
$24,250
250 cartons
a) Compute Vintage Manufacturing predetermined manufacturing overhead rate for 2023.
b) How much manufacturing overhead was allocated to Job #242?
c) Calculate the total cost & quotation price of Job #242, given that a margin of 20% is applied.
d) Calculate the production cost per unit (cost per carton) of finished product?
e) Assuming that the quote was accepted by the customer, state the journal entries that would be
necessary to record the production costs for Job#242.
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