Victoria Co. is a small textile manufacturer using machine-hours to calculate the single indirect-cost rate to...

Victoria Co. is a small textile manufacturer using machine-hours to calculate the single indirect-cost rate to allocate manufacturing overhead costs to various jobs contracted during the year. The following estimates are provided for the coming year for the company to manufacture 1,000 jackets and for the 100 jackets to be custom made for Victoria High School Science Olympiad.

Company Victoria High School Job

Direct materials $25,000 $2,700

Direct manufacturing labor $15,000 $1,500

Manufacturing overhead costs $40,000

Machine-hours (mh) 500 mh 60 mh

Required:

a. Determine the annual manufacturing overhead cost-allocation rate per machine hour for the Victoria Co.

b. Determine the amount of manufacturing overhead costs allocated to the Victoria High School job.

c. Determine the estimated total manufacturing costs for the Victoria High School job.

d. Determine the estimated manufacturing costs for a jacket to be used in Victoria High School Olympiad.

e. Determine the estimated manufacturing costs for Victoria Co. to make a jacket. Explain why the average cost of a jacket to manufacture by Victoria Co. is different from the custom made jacket for Victoria High School Olympiad.

Expert Solution

ekkarill92 answered 1 year ago

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