PT Yara Mutiara must submit a tender for 15,000 units of freshwater pearl necklaces. The company has two departments, namely assembly and decoration. It is estimated that in the assembly department the raw material costs incurred are $12,000 and direct labor costs are $15,600. Company overhead is charged at a rate of $100 per hour of direct labor in the assembly department and 35% of direct labor in the decoration department. It is estimated that 100 direct labor hours in the assembly department and direct labor costs in the decoration department are $10,000. The company wants to get a markup of 50% of the total cost of production.

Required: 

Calculate the following:
1. Estimation of main costs
2. Estimated manufacturing costs
3. Estimated conversion costs
4. Tender price

Answer rating: 100% (QA)

1Estimation of selling price Estimation of gross profit for each department Cost estimation Assembly department Raw materials 12000 Direct labor 15600 ... View the full answer