Woodfree 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 guidelines. (Recycled content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials.) As a result, Woodfree Plastics includes two types of direct material charges in their job cost for each job:
1) Virgin materials (non-recycled);
2) Recycled-content materials. Woodfree 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.
Woodfree Plastics uses a predetermined manufacturing overhead rate of $15 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Summit County:
Description Quantity Cost
Virgin materials.....................250 pounds...............$ 3.50 per pound
Recycled-content materials........300 pounds...............$ 3.00 per pound
Direct labor..............................12 hours..................$18.00 per hour
Requirements
1. Calculate the total cost of the Summit County job.
2. Calculate the percentage of recycled-content used in the Summit County job (using pounds.) If items purchased by Summit County are required by county charter to contain at least 50% recycled-content, does the job meet that requirement?