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. 20 people are employed in the molding
department and the assembly department employs 15 people.
Each person in these two departments works 3,000 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
two-stage 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 ....... $81,000 $63,000
Repair hours ..................30,0004,000
Kilowatt hours ................48,00070,000
Molding Assembly
Directly trace overhead ....... $72,000 $54,000
Repair hours ..................3,60012,400
Kilowatt hours ................20,00012,000
The company is preparing to bid on Job AZ-20 which requires
50 direct labor hours in the molding department and 75 direct
labor hours in the assembly department. The expected direct
material and direct labor cost for Job AZ-20 is $425. LLB
Company has a policy of bidding full cost plus a 25% markup.
Calculate the bid price for Job AZ-20.

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