Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing overhead costs at s1,015,000, and they estimated total direct labor costs at $1,400,000. The administration and selling overheads are to be absorbed in each job cost at 15% of production cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # W500. Data for the job are as follows: Direct materials cost Direct labour cost $169,450 $230,000 Direct labour hours Special Design Cost Distribution quote from haulage company Units of product produced 400 hours $12,300 $17,930 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500? c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied. d) How much was the production cost per unit (cost per crate) of finished product?

Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing overhead costs at s1,015,000, and they estimated total direct labor costs at $1,400,000. The administration and selling overheads are to be absorbed in each job cost at 15% of production cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # W500. Data for the job are as follows: Direct materials cost Direct labour cost $169,450 $230,000 Direct labour hours Special Design Cost Distribution quote from haulage company Units of product produced 400 hours $12,300 $17,930 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500? c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied. d) How much was the production cost per unit (cost per crate) of finished product?

Name: Epsilon Manufacturing Company uses a predetermined manufacturing over
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Description: Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at sı,015,000, and they estimated total direct labor

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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