Byte Computer Company, a manufacturing organization has just completed an order

Question

Byte Computer Company, a manufacturing organization has just completed an order the Grater, Ltd., placed for 80 computers. Direct materials, purchased parts, and direct labor costs for the Grater order are as Follows:

Cost of direct materials $36,750.00 Direct labor hours 220

Cost of purchased parts $21,300.00 Average direct labor pay rate $15.25

Overhead costs were applied at a single, planwide overhead rate of 270 percent of direct labor dollars.

Required

Using the traditional costing method, compute the total cost of the Grater order.

Explanation / Answer

We have for 80 Compuetrs:

Cost of direct materials 36,750.00

Cost of purchased parts $21,300.00

Dir Labour cost 220*15.25 = $3,355.00

Overhead = 270%*$3,355 = $9059.00

---------------------------------

Total Cost = $70,464.00

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