TAKE HOME ASSIGNMENT 2 220 002 1. Tel Corp. has the following estimated costs fo

Question

TAKE HOME ASSIGNMENT 2 220 002 1. Tel Corp. has the following estimated costs for 2016: Direct materials Direct labour Rent on factory building Sales salaries Depreciation on factory equipment Indirect labour Production supervisor's salary $175,000 $1,800,000 $180,000 $220,000 $65,000 $80,000 $70,000 40,000 Machine hours Other data: Tel Corp. estimates that 60,000 direct labour hours will be worked during the year. Assume that manufacturing overhead is applied on the basis of machine hours and Job XY120 is completed during the year. Instructions (8 marks) a) Calculate the overhead rate per machine hour. (2 marks) b) Calculate the rate of direct labour per hour. (2 marks) c) Calculate the total cost of a job that will take 350 machine hours, $25,000 in direct material, and 70 direct labour hours using a normal cost system. (4 marks)

Explanation / Answer

1 Manufacturing overheads Rent on factory building 180000 depreciation on factory building 65000 Indirect labor 80000 Production supervisor salaries 70000 Total manufacturing overheads 395000 Total machine hour 40000 Manufacturing overhead rate 9.875 2 Direct labor cost 1800000 Estimated direct labor hours 60000 Rate of direct labor per hour 30 3 Direct material 25000 Direct labor 2100 (70*30) Manufacturing overheads applied 3456.25 (350*9.875) Total cost of job 30556.25

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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