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:

1. Calculate the total cost of the job clearly showing the prime cost and factory cost.
2. Calculate the unit cost ( round to the nearest unit)
3. Determine the profit on the overall job and the profit per unit if the selling price is $90

Answer rating: 100% (QA)

a Description Amount Amount Materials 7250 Labour Cutting 140 Hours X 410 574 Stiching 240 Hours X 3... View the full answer