Lawrence Plastics manufactures custom park furniture and signage from recycled plastics (primarily shredded milk jugs). Many of the company's customers are municipalities that are required by law to purchase goods that meet certain recycled-content guidelines. (Recycled-content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials). As a result, Lawrence includes two types of direct material charges in its job cost for each job: (1) virgin materials (non-recycled), and (2) recycled-content materials. The company also keeps track of the pounds of each type of direct material so that the final recycled-content percentage for the job can be reported to the customer. Lawrence also reports on the percentage of recycled-content as a total of total plastic used each month in its own internal reporting system to help to encourage managers to userecycled-content whenever possible. Lawrence Plastics uses a predetermined manufacturing overhead rate of $8 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Jefferson County: Description Quantity Cost Virgin materials 80 pounds $3.80 per pound Recycled-content materials 120 pounds $3.40 per pound Direct labor 14 hours $13.00 per hour Requirements: 1. Calculate the total cost of the Jefferson County job. 2. Calculate the percentage of recycled content used in the Jefferson County job (using pounds). If items purchased by Jefferson County are required by county charter to contain at least 50% recycled content, does this job meet that requirement?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lawrence Plastics manufactures custom park furniture and signage from recycled plastics (primarily shredded milk jugs). Many of the company's customers are municipalities that are required by law to purchase goods that meet certain recycled-content guidelines. (Recycled-content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials). As a result, Lawrence includes two types of direct material charges in its job cost for each job: (1) virgin materials (non-recycled), and (2) recycled-content materials.

The company also keeps track of the pounds of each type of direct material so that the final recycled-content percentage for the job can be reported to the customer. Lawrence also reports on the percentage of recycled-content as a total of total plastic used each month in its own internal reporting system to help to encourage managers to userecycled-content whenever possible. Lawrence Plastics uses a predetermined manufacturing overhead rate of

$8 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Jefferson County:

Description	Quantity	Cost
Virgin materials	80 pounds	$3.80 per pound
Recycled-content materials	120 pounds	$3.40 per pound
Direct labor	14 hours	$13.00 per hour

Requirements:

1.	Calculate the total cost of the Jefferson County job.
2.	Calculate the percentage of recycled content used in the Jefferson County job (using pounds). If items purchased by Jefferson County are required by county charter to contain at least 50% recycled content, does this job meet that requirement?