Question: Fun Time Industries manufactures custom designed playground equipment for schools

Fun Time Industries manufactures custom- designed playground equipment for schools and city parks. Fun Time expected to incur $ 586,600 of manufacturing overhead cost, 41,900 of direct labor hours, and $ 921,800 of direct labor cost during the year (the cost of direct labor is $ 22 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During May, Fun Time completed Job 309. The job used 175 direct labor hours and required $ 14,200 of direct materials. The City of Southtown has contracted to purchase the playground equipment at a price of 22% over manufacturing cost.

1. Calculate the manufacturing cost of Job 309.
2. How much will the City of Southtown pay for this playground equipment?

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  • CreatedAugust 27, 2014
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