1. a machine ship has direct materials cost of $1,800,000 direct labour of $4,20
ID: 2585450 • Letter: 1
Question
1. a machine ship has direct materials cost of $1,800,000 direct labour of $4,200,000(direct labour rate is $50 per hour) and budgeted indirect manufacturing costs of $850,000. management believes that indirect manufacturing costs increase with direct labour hours. what is the budgeted indirect manufacturing cost rate? Show work
2.a local consulting firm employes 30 full time staff. the budgeted compensation per employee is $50 000, for 2000hours. all direct labour costs are charged to clients. any other costs are included in a single indirect-cost pool, allocated according to labour-hours. actual indirect costs were $750 000. Budgeted indirect costs for th eyear are $525000 and the firm expects to have 60 clients during the coming year. what is the total cost of a job which took 27 hours, using normal costing? show work
3. a company employes 25 full time staff. the company spent $75000 in advertising in the year (this amount is a period cost with a constant amount spent each year). budgeted indirect manufacturing costs total $250 000 and the direct labour rate is $15 per hour. Budgeted labour hours were 500 000 and actual labour hours were 524000. actual indirect overhead was $274600. What are the actual and normal indirect cost rates respectively? show work
Explanation / Answer
Q1.
Direct Labour cost $42,00,000
Direct Labour rate per hour $ 50 per hour
Direct labour hours (Direct labour cost/ Labour rate per hour ) = 4200,000 /50 = 84,000 labour hours
Budgeted Indirect Cost $ 850,000
Budgeted Indirect COst rate based on Labour hours = Budgeted Indirect Cost / Labour hours
= 850,000 /84,000 = $ 10.12 per labour hour
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