Lincoln 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, Lincoln includes two types of direct material charges in its job cost for each job:
1) Virgin materials (non-recycled);
2) Recycled content materials. Lincoln 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. Lincoln also reports on the percentage of recycled-content as a total of total plastic used each month on its own internal reporting system to help to encourage managers to use recycled-content whenever possible.
Lincoln Plastics uses a predetermined manufacturing overhead rate of $10 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Osage County:
Description Quantity Cost
Virgin materials.............................100 pounds..............$ 3.50 per pound
Recycled-content materials...............150 pounds..............$ 3.00 per pound
Direct labor.....................................12 hours...............$15.00 per hour
Requirements
1. Calculate the total cost of the Osage County job.
2. Calculate the percentage of recycled-content used in the Osage County job (using pounds). If items purchased by Osage County are required by county charter to contain at least 50% recycled-content, does this job meet that requirement?