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29 November, 16:50

Enjoy It Industries manufactures custom-designed playground equipment for schools and city parks. Enjoy It expected to incur $ 750 comma 600 of manufacturing overhead cost, 41 comma 700 of direct labor hours, and $ 1 comma 000 comma 800 of direct labor cost during the year (the cost of direct labor is $24 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During September , Enjoy It completed Job 302. The job used 165 direct labor hours and required $ 13 comma 900 of direct materials. The City of Southtown has contracted to purchase the playground equipment at a price of 20 % over manufacturing cost.

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  1. 29 November, 18:09
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    The computation of the total manufacturing cost is shown below:

    = Direct material used + direct labor cost + manufacturing overhead cost

    where,

    Direct material used = $13,900

    Direct labor cost = 165 direct labor hours * $24 = $3,960

    And, the manufacturing overhead cost = 165 direct labor hours * $18 = $2,970

    So, the total manufacturing cost is

    = $13,900 + $3,960 + $2,970

    = $20,830

    The $18 is come from predetermined overhead rate that is computed below:

    = Expected manufacturing overhead cost : expected direct labor hours

    = $750,600 : 41,700

    = $18

    And, the amount paid is

    = Total manufacturing overhead * 100 + 20%

    = $20,830 * 120%

    = $24,996
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Home » Business » Enjoy It Industries manufactures custom-designed playground equipment for schools and city parks. Enjoy It expected to incur $ 750 comma 600 of manufacturing overhead cost, 41 comma 700 of direct labor hours, and $ 1 comma 000 comma 800 of direct
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