Question

direct materials and direct manufacturing Donna Corporation manufactures custom cabinets for kitchens. It uses a normal costing system with two direct cost categories labor--and one indirect cost pool, manufacturing overhead costs It provides the following information for 2017 Click the icon to view the information for 2017) Read the requirement Begin by calculating the budgeted Indirect cost rate. Select the formula and then calculate the rate (Assume the cost allocation base is direct labor hours) Budgeted manufacturing overhead costs Budgeted labor hours Budgeted indirect cost rate

Answer 1

WORKING NOTES:
CALCULATION OF BUDGETED INDIRECT COST RATE
Budgeted indirect cost rate =	Budgeted Manufacturing overhead Costs	Divide By	Budgeted labour Hours
Budgeted indirect cost rate =	$                          9,60,000	"/" By	32,000 Hours
Budgeted indirect cost rate =	$                                      30	Per Hour
SOLUTION :
CALCULATION OF TOTAL MANUFACTURING COST
Direct Material Cost	$                                3,500
Direct Labour Cost (160 Hours X $ 20)	$                                3,200
Manufacturing overhead (160 Hours X $ 30)	$                                4,800
Total Cost	$                              11,500
Answer = $ 11,500