New Wood Plastics manufactures custom park furniture and signage from recycled plastics ( primarily shredded milk jugs.) Many of the company’s customers are municipalities that are required by law to purchase goods that meet certain recycled- content guide-lines. (Recycled content can include post- consumer waste materials, pre- consumer waste ­materials, and recovered materials.) As a result, New Wood Plastics includes two types of direct material charges in its job cost for each job: (1) virgin materials (non- recycled), and (2) recycled- content materials. New Wood Plastics also keeps track of the pounds of each type of direct material so that the final recycled- content percentage for the job can be reported to the customer. The company also reports on the percentage of recycled- ­content as a total of plastics used each month on its own internal reporting system to help encourage managers to use recycled content whenever possible.
New Wood Plastics uses a predetermined manufacturing overhead rate of $ 8 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Mitchell County:

1. Calculate the total cost of the Mitchell County job.
2. Calculate the percentage of recycled- content used in the Mitchell County job (using pounds.) If items purchased by Mitchell County are required by county charter to contain at least 40% recycled- content, does the job meet thatrequirement?

  • CreatedAugust 27, 2014
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