Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2023, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor hours at 7,000. 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 company wishes to quote for job # 222. Job stats are as follows: Direct Materials $173,250 Direct Labour Cost $240,000 Direct Labour Hours 500 hours Special Design Cost $8,750 Distribution quote from haulage company $21,700 Units of product produced 400 cartons Compute Miguel’s Manufacturing Company predetermined manufacturing overhead rate for 2023.
Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2023, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor hours at 7,000. 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 company wishes to quote for job # 222. Job stats are as follows: Direct Materials $173,250 Direct Labour Cost $240,000 Direct Labour Hours 500 hours Special Design Cost $8,750 Distribution quote from haulage company $21,700 Units of product produced 400 cartons Compute Miguel’s Manufacturing Company predetermined manufacturing overhead rate for 2023.
Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2023, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor hours at 7,000. 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 company wishes to quote for job # 222. Job stats are as follows: Direct Materials $173,250 Direct Labour Cost $240,000 Direct Labour Hours 500 hours Special Design Cost $8,750 Distribution quote from haulage company $21,700 Units of product produced 400 cartons Compute Miguel’s Manufacturing Company predetermined manufacturing overhead rate for 2023.
Miguel Manufacturing Company uses a predetermined manufacturing overhead rate based on direct labor hours. At the beginning of 2023, they estimated total manufacturing overhead costs at $2,352,000, and they estimated total direct labor hours at 7,000. 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 company wishes to quote for job # 222. Job stats are as follows:
Direct Materials
$173,250
Direct Labour Cost
$240,000
Direct Labour Hours
500 hours
Special Design Cost
$8,750
Distribution quote from haulage company
$21,700
Units of product produced
400 cartons
Compute Miguel’s Manufacturing Company predetermined manufacturing overhead rate for 2023.
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
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