Question: Please answer part e). thank you! D'Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It



D'Leary Corporation manufactures special purpose portable structures (huts, mobile offices, and so on) for use at construction sites. It only builds to order (each unit is built to customer specifications). O'Leary uses a normal job costing system. Direct laborat O'Leary is paid $30 per hour, but the employees are not paid if they are not working on jobs. Manufacturing overhead is assigned to jobs by a predetermined rate on the basis of direct labor-hours. The company incurred manufacturing overhead costs during two recent years (adjusted for price-level changes using current prices and wage rates) as follows. Year 1 69,600 Year 2 56, 600 Direct labor-hours worked Manufacturing overhead costs incurred Indirect labor Employee benefits Supplies Power Heat and light Supervision Depreciation Property taxes and Insurance Total manufacturing overhead costs $2,864,000 1,844,000 696,000 653.eee 143,200 783,790 2,060,500 303,510 $9,048,000 $2,264,000 849,000 566,000 548,000 143,200 664,050 2,860, see 829.25e $7.924,000 At the beginning of year 3. O'Leary has two jobs, which have not yet been delivered to customers. Job MC 270 was completed on December 27. year 2. It is scheduled to ship on January 7 year 3. Job MC-275 is still in progress. For the purpose of computing the predetermined overhead rate, O'Leary uses the previous year's actual overhead rate Data on direct material costs and direct labor hours for these Jobs in year 2 follow Direct material costs Direct labor-hours Job MC-270 $272,600 2,630 hours Job MC-275 $497,600 3,330 hours During year 3. O'Leary incurred the following direct material costs and direct labor-hours for all jobs worked in year 3, including the completion of Job MC-275. Direct material costs Direct labor-hours Actual manufacturing overhead $11,842,600 76,600 $ 9,744, eee At the end of year 3, there were four jobs that had not yet shipped. Data on these jobs follow. Direct materials Direct labor-hours Job status MC-389 $45,800 1.766 hours Finished MC-390 $69,600 2,830 hours Finished MC-397 $104,100 6,230 hours In progress MC399 $31,500 1.430 hours In progress e. A customer has asked O'Leary to bid on a job to be completed in year 4 O'Leary estimates that the job will require about $93.800 in direct materials and 5,130 direct labor-hours. Because of the economy, O'Leary expects demand for its services to be low in year 4, and the CEO wants to bid aggressively, but does not want to lose any money on the project. O'Leary estimates that there would be virtually no sales or administrative costs associated with this job What is the minimum amount O'Leary can bid on the job and still not incur a loss? Required A Required B Required Required D Required E A customer has asked O'Leary to bid on a job to be completed in year 4. O'Leary estimates that the job will require about $93,800 in direct materials and 5,130 direct labor-hours. Because of the economy, O'Leary expects demand for its services to be low in year 4, and the CEO wants to bid aggressively, but does not want to lose any money on the project. O'Leary estimates that there would be virtually no sales or administrative costs associated with this job. What is the minimum amount O'Leary can bid on the job and still not incur a loss? Show less Minimum amount $ 965,900
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
