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Characteristics of Production Process, Cost Measurement
Vince Kim, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:
Number of direct labor hours | 6,790 |
Direct labor cost | $67,900 |
$54,999 |
During the year, the following actual amounts were experienced:
Number of direct labor hours | 6,070 |
Direct labor incurred | $66,770 |
Overhead incurred | $53,919.81 |
Required:
1. Should EcoScape use
2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours,
What is the overhead rate? Round your answer to the nearest cent.
What is the average actual wage rate?
$ per direct labor hour
What is the cost of an installation that takes $3,440 of direct materials and 30 direct labor hours?
$
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