Jacob Manufacturing is planning to sell 1,200 boxes of ceramic tile, with produc

Question

Jacob Manufacturing is planning to sell 1,200 boxes of ceramic tile, with production estimated at 1,160 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.50 per pound and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Jacob has 5,200 pounds of clay mix in beginning inventory and wants to have 6,000 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month?

Explanation / Answer

labor cost = 1160*25%*15 = $4350 Manufacturing overhead = 110%*$4350 = $4785

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