Industries manufactures custom-designed playground equipment for schools and city parks. Outdoor expected to incur $707,200 of manufacturing overhead cost, 41,600 of direct labor hours, and $1,414,400 of direct labor cost during the year (the cost of direct labor is $34 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During December, Outdoor completed Job 307. The job used 155 direct labor hours and required $15,100 of direct materials. The City of Adams has contracted to purchase the playground equipment at a price of 26% over manufacturing cost.
Requirement
1. Calculate the manufacturing cost of Job 302.
First identify the formula, then calculate the predetermined overhead rate.
Estimated yearly overhead costs Estimated yearly direct labor hours Predetermined overhead rate 627,000 41,800 15 per hour
2. Calculate the manufacturing cost of Job 302.
Direct materials
Direct labor
Manufacturing overhead 14,500
Total job cost
