Question

Manton Manufacturing applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Bear product. Estimates for this order include: Direct materials of $79,000; 680 direct manufacturing labor-hours at $25 per hour; and a 25% markup rate on total manufacturing costs. Manufacturing overhead cost estimates for this special-order total ________.

Answer 1

Answer: $40,800

Explanation:

Given the following :

Indirect cost rate = $60 per direct manufacturing labor-hour

Total direct manufacturing labor-hour of special order = 680

Thus means that the Indirect cost or overhead associated with the manufacture of the special order is :

(Total direct manufacturing labor-hour × Indirect cost per direct manufacturing labor-hour)

= (680 labor-hours × $60)

= $40,800

Therefore, Manufacturing overhead cost estimates for this special-order total is $40,800.