Brown's factory has three production department- Preparation, Assembly and Finishing with two service departments-Maintenance and Material handling.The
Question:
Brown's factory has three production department- Preparation, Assembly and Finishing with two service departments-Maintenance and Material handling.The budgeted information for the year 2019 is as follows:
DepartmentOverhead cost
Capacity Utilization
Allocated/Apportioned
Preparation$45,000
2000 machine hours
Assembly$24,0006000 man hours
Finishing$21,000
Maintenance$3,000
Material Handling
$2,000
The service department cost should be reapportioned to the production department as follows:
Preparation
AssemblyFinishingMaintenance50%20%30%Material Handling
40%40%20%
The wages relating to the preparation department are overhead cost.In the Assembly and Finishing department the wage rate is $2.10 per hour.The administration and selling overheads are to be absorbed in the job at 33 1/3 % of production cost.Distribution should be added to each job according to quotes from outside carriage companies.The company wishes to quote for job #2020.The following information is available for job$2020
Direct material$7,320
Time requiredPreparation 40 machine hours
Assembly 30 man hours
Finishing50 man hours
Special design$5,200
Distribution quote from haulage company$2,000
Required:
Calculate the total cost and quotation price for job#2020 where a profit margin of 30% on selling price is applied.(Total 25 marks)
Expert Answer:
To calculate the total cost and quotation price for job 2020 we need to follow these steps 1 Calcula... View the full answer
