Question: Show me the steps to solve LLB Company is developing departmental overhead rates based upon direct labor hours for its two production departments, molding and
Show me the steps to solve
LLB Company is developing departmental overhead rates based
upon direct labor hours for its two production departments,
molding and assembly. people are employed in the molding
department and the assembly department employs people.
Each person in these two departments works hours per
year. Two service departments, repair and power, directly
support the production departments. Service departments costs
are allocated to production departments using a reciprocal
twostage allocation method. The repair department costs are
allocated on the basis of repair hours and the power department
costs are allocated on the basis of kilowatt hours. Information
for the four departments is presented below:
Repair Power
Directly trace overhead $ $
Repair hours
Kilowatt hours
Molding Assembly
Directly trace overhead $ $
Repair hours
Kilowatt hours
The company is preparing to bid on Job AZ which requires
direct labor hours in the molding department and direct
labor hours in the assembly department. The expected direct
material and direct labor cost for Job AZ is $ LLB
Company has a policy of bidding full cost plus a markup.
Calculate the bid price for Job AZ
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