HP manufactures printers. HP has two large orders from its customers. Data regar

Question

HP manufactures printers. HP has two large orders from its customers. Data regarding these two orders and HP's expected overhead costs are shown below:

Please show your work anwering the following:

A. What is the total expected full cost for Customer A?

B. What is the total expected full cost for Customer B?

Customer A Customer B Number of Printers Ordered 500 1,000 Direct materials $20,000 $25,000 Direct labor costs $8,000 $15,000 Direct labor hours 300 700 Setup hours 70 30 Inspection hours 150 100 Power (kilowatt hours) 1,250 1,250

Explanation / Answer

Working note

Customer A Customer B Direct materials                20,000.00                  25,000.00 Direct labor costs                   8,000.00                  15,000.00 Direct labor hours at 10 per hour                   3,000.00                     7,000.00 Setup hours at 100 per hour                   7,000.00                     3,000.00 Inspection hours at 20 per hour                   3,000.00                     2,000.00 Power at 2 per kilowat hour                   2,500.00                     2,500.00 Total Full Cost                43,500.00                  54,500.00

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