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AB E 1 2 Bay Breeze Resort has placed an order for 30 kayaks from Whale Sports. Each kayak is formed in an oven and cooled. The excess plastic is then trimmed away. The final steps of the production process are to attach the hatches, seat, ropes, and bungees to the kayak. 3 4 5 6 Sofia Serrano, the kayak plant manager, knows that manufacturing each kayak requires 47 pounds of polyethylene powder and 2 finishing kits (rope, seat, hardware, etc.). The powder costs $1.20 per pound and the finishing kits cost $90 each. Each kayak uses two kinds of labor: 3 hours of type A labor from employees who run the oven and trim the plastic, and 2.5 hours of type B labor from employees who attach the hatches, seat, and other hardware. The type A employees are paid $16 per hour and the type B employees are paid $12 per hour. For purposes of this problem, assume that overhead is applied to all jobs at a rate of 170% of direct labor costs. 7 8 9 10 11 12 13 14 15 16 Instructions Determine the total cost of the Bay Breeze Resort order and the cost of each individual kayak in the order. Identify costs as direct materials, direct labor, or manufacturing overhead. 17 Step 1: Complete a block of relevant data by filling in the green-highlighted cells. 19 2n 21 Number of kayaks ordered Resources required for each kayak Polyethylene powder Finishing kit Type A labor Type B labor pounds kits hours hours 22 23 24 25 26 27 28 29 30 31 32 33 Predetermined Overhead Rate of direct labor cost Costs Polyethylene powder Finishing kits Type A labor rate Type B labor rate per pound per kit per hour 34 35 per hour 26 42 11 45 AB E F 38 Step 2: Calculate the cost of ONE kayak by filling in the green-highlighted cells. 39 40 Cost of one kayak: 41 Direct materials Polyethylene powder 43 Finishing kit Direct labor 46 Type A 47 Type B 48 49 Manufacturing overhead 50 51 Total cost for one kayak 52 53 Step 3: Calculate the cost of the total kayak order by filling in the green-highlighted cell. 55 Cost of total kayak order: 56 57 58 CA 59

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