COMPREHENSIVE PROBLEM 5
60 Minutes, Strong COMPREHENSIVE PROBLEM 5
THE GILSTER COMPANY
a.
$ 25,000
=
=
Total Expected Overhead
Overhead Rate—Department A
Overhead Rate—Department B
Expected Dept. B Machine
Total Expected Direct Labor Hours
Budgeted Dept. A Overhead
Expected Dept. A Machine
Budgeted Dept. B Overhead
Direct materials
Plantwide overhead rate using direct labor hours:
Overhead
Rate =
Manufacturing costs for Job 110:
COMPREHENSIVE PROBLEM 5
THE GILSTER COMPANY (continued)
Direct materials ……………………………………………………………………………
…
$ 25,000
Direct labor—Dept. A ……………………………………………………………………
…
45,000
Manufacturing costs for Job 110:
…
e.
COMPREHENSIVE PROBLEM 5
THE GILSTER COMPANY (concluded)
The cost per unit calculated in part b ($10.80/unit) is less than the contractor’s price of $12.00