Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. mattawa manufacturing inc. has four categories of

Mattawa Manufacturing Inc. has four categories of overhead. The expected overhead costs for each of...

90.2K

Verified Solution

Question

Accounting

Mattawa Manufacturing Inc. has four categories of overhead. The expected overhead costs for each of the categories for the next year are as follows:

Expected Costs Cost Driver

Activity Maintenance $510,000

Machine hours 60,000

Material handling 250,000

Material moves 20,000

Setups 60,000

Setups 3,000

Inspection 21,000

Inspections 12,000

Currently, the company applies overhead using a predetermined overhead rate based upon budgeted direct labour hours of 100,000. The company has been asked to submit a bid on a proposed job. Usually bids are based upon full manufacturing costs plus a percentage of 10 percent. Estimates for the proposed job are as follows:

Direct materials $30,000

Direct labour $24,000

Number of direct labour hours 8,000

Number of material moves 100

Number of inspections 120

Number of setups 24

Number of machine hours 4,000

Required:

1. If the company used activity-based cost drivers to assign overhead, calculate the bid price of the proposed job.

2. If the company used direct labour hours as the cost driver, calculate the bid price of the proposed job.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students