Modern Metalworks Company has two departments, milling and assembly. The company

Question

Modern Metalworks Company has two departments, milling and assembly. The company uses a job costing system that employs a single, plantwide support cost driver rate to apply support costs to jobs on the basis of direct labor hours. That is, the plantwide cost driver rate is computed by dividing plantwide support costs by total plantwide direct labor hours. The following estimates are for October: Support costs- Milling $120,000, Assembly $160,000 Direct Labor Hours- Milling, 8000, Assembly 12000 Machine Hours- 12000, Assembly 6000 The following information pertains to job 714, which was started and completed during October: Direct Labor hours- Milling 10, Assembly 40 Machine hours- Milling 18, Assembly 8 Direct materials costs- Milling $800, Assembly $50 Direct labor costs- $100, Assembly $600 a. Prepare a job cost sheet for job 714 b. Assume next that instead of using a single, plantwide support cost driver rate, the company uses machine hours as the cost driver for the application of support costs in the milling department, and it uses direct labor hours as the cost driver in the assembly department. Prepare a job cost sheet for job 714. c. Using the costs you computed in (a) and (b), determine the bid price that Modern Metalworks will quote if it uses a 25% markup on total manufacturing cost

Explanation / Answer

Milling Assembly Total Support Costs 120,000.00 160,000.00 280,000.00 Direct Labor Hours 8,000.00 12,000.00 20,000.00 Machine Hours 12,000.00 6,000.00 18,000.00 Job 714 Direct Labor Hours 10.00 40.00 50.00 Machine Hours 18.00 8.00 26.00 Assumption 1 Direct Material 800.00 50.00 850.00 Direct Labor 100.00 600.00 700.00 Overhead 140.00 560.00 700.00 Total Cost 1,040.00 1,210.00 2,250.00 Assumption2 Direct Material 800.00 50.00 850.00 Direct Labor 100.00 600.00 700.00 Overhead 180.00 533.33 713.33 Absorption Rate 120,000 / 12,000 160000/ 12000 10 per DMH 13.33 per DLH (10 * 18 ) ( 13.33 * 40 ) Total 1080 1183.33 2263.33

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.