3-38 (Job cost sheet,
markup, single rate versus departmental rates) Modern Metalworks Company
has two departments, milling and assembly. The company uses a job
costing system that employs a single, plantwide support cost driver rate
to apply support costs to jobs on the basis of direct labor hours. That
is, the plantwide cost driver rate is computed by dividing plantwide
support costs by total plantwide direct labor hours. The following
estimates are for October: Support costs- Milling $120,000, Assembly
$160,000 Direct Labor Hours- Milling, 8000, Assembly 12000 Machine
Hours- 12000, Assembly 6000 The following information pertains to job
714, which was started and completed during October: Direct Labor hours-
Milling 10, Assembly 40 Machine hours- Milling 18, Assembly 8 Direct
materials costs- Milling $800, Assembly $50 Direct labor costs- $100,
Assembly $600
a. Prepare a job cost sheet for job 714
b. Assume next that instead of using a single, plantwide support cost
driver rate, the company uses machine hours as the cost driver for the
application of support costs in the milling department, and it uses
direct labor hours as the cost driver in the assembly department.
Prepare a job cost sheet for job 714.
c. Using the costs you computed in (a) and (b), determine the bid price
that Modern Metalworks will quote if it uses a 25% markup on total
manufacturing cost.
Click here for the solution: 3-38 (Job cost sheet, markup, single rate versus departmental rates) Modern Metalworks Company has two departments, milling and assembly
