Actual Price Current Market Price per Pound 089 47 144 s5

Actual Price Current Market Price per Pound $ 0.89 $ ?.47 $ 1.44 s.52 (Salvage) per Pound when Raw Pounds in Material Inventory Purchased AG-5 KL-2 cH-7 21, 000 5, 500 7,100 DF-610,260 4, 600 $0.79 $ 0.42 $1.24 $0.54 S0.61 BH-3 The current direct labor wage rate is $18 per hour. The predetermined overhead rate is based on direct labor-hours (DLH). The predetermined overhead rate for the currént year, based on a two-shift capacity with no overtime, is as follows: variable manufacturing overhead Fixed nanufacturing overhead Combined predetermined overhead rate $4.20 per DLH 7.20 per OLH $11.40 per DLH Wesco\'s production manager reports that the present equipment and facilities are adequate to manufacture the Zwinger compound. Therefore, the order would have no effect on total fixed manufacturing overhead costs. However, Wesco is within 490 hours of its two- shift capacity this month. Any additional hours beyond the 490 hours must be done in overtime. If need be, the Zwinger compound could be produced on regular time by shifting a portion of GrowNWeed production to overtime. Wesco\'s direct labor wage rate for overtime is $27 per hour. There is rio allowance for any overtime premium in the predetermined overhead rate.

Solution

Workings

2.

1	Direct Material Cost		19,461.80
	Direct Labour Hour	18*37*34	22,644.00
	Overtime	3*37*34	3,774.00
	Variable Manu OH	4.20*37*34	5,283.60
	Incremental Manufacturing Costs	51,163.40