Manufactures a childrens clothing line which has four departments the budgeted overheads for Job AB1 are as
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Question:
Manufactures a children’s clothing line which has four departments the budgeted overheads for Job AB1 are as follows.
Department Budgeted overheads Overhead absorption base
Cutting 15,000 1000 labor hours
Stitching 30,000 2500 machine hours
Finishing 25,000 5000 labor hours
Packaging 15,000 1500 labor hours
Materials $ 7,250
An order of 550 shirts was made which incurred the following cost.
Labor 140 hours cutting at $4.10 / hour
240 hours stitching at $3.20 /hour
95 hours finishing at $ 2.00 / hour
190 hours packaging at $ 5 / hour
$3,300 was paid for cutting scissors used in the cutting of shirts. Selling and administration overheads are 10% of factory cost. The time booking for machine hours is 320 hours.
Required:
- Calculate the total cost of the job clearly showing the prime cost and factory cost.
- Calculate the unit cost ( round to the nearest unit)
- Determine the profit on the overall job and the profit per unit if the selling price is $90
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