Pharoah Hollow Resort has ordered 24 rotomolded kayaks from Current Designs. Each kayak will be formed in the rotomolded oven, cooled, and then have the excess plastic trimmed away. Then, the hatches, 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 $1.40 per pound, and the finishing kits cost $152 each. Each kayak will use two kinds of labor: 2 hours of more-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 Pharoah 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 $
Pharoah Hollow Resort has ordered 24 rotomolded kayaks from Current Designs. Each kayak will be formed in the rotomolded oven, cooled, and then have the excess plastic trimmed away. Then, the hatches, 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 $1.40 per pound, and the finishing kits cost $152 each. Each kayak will use two kinds of labor: 2 hours of more-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 Pharoah 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 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:Pharoah Hollow Resort has ordered 24 rotomolded kayaks from Current Designs. Each kayak will be formed in the rotomolded oven,
cooled, and then have the excess plastic trimmed away. Then, the hatches, 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 $1.40 per pound, and the finishing kits cost $152
each. Each kayak will use two kinds of labor: 2 hours of more-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 Pharoah 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
$
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education