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CoursHeroTranscribedText: Case 4: Ray Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are listed as follows: Maintenance P510,000 Material handling 250,000 Setups 60,000 Inspection 210,000 Currently, overhead is applied using a predetermined overhead rate based upon budgeted direct labor hours. 100,000 direct labor hours are budgeted for next year. The company has been asked to submit a bid for a proposed job. The plant manager feels that obtaining this job would result in a new business in future years. Usually bids are based upon full manufacturing costs plus 10 percent. Estimates for the proposed job are as follows: Direct materials P30,000 Direct labor (8,000 hours) P24,000 Number of material moves 100 Number of inspections 120 Number of setups 24 Number of machine hours 4,000 The plant manager has heard of a new way of applying overhead that uses cost pools and activity drivers. Expected activity for the four activity drivers that would be used are: Machine hours 60,000 Material moves 20,000 Setups 3,000 Quality inspections 12,000 Required: (Show solution with explanation) What is the total cost of the proposed job if Ray Manufacturing uses direct labor hours as its only activity driver

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