INTERNET ADVERTISING QUESTIONS:
1. Set up T accounts and trace cost flows for actual requisitions and overhead to Job 467. Allocate actual overtime to the job as well (i.e. the job has been done).
Wages Payable Overhead Direct Materials
452 Data Entry Cost 316.4 Benefits 460.00
48 Over-Time 460 Requisitions
0.00
Work In Process Finished Goods
Data Entry Cost 452.00 COGM 1,276.40
Over-time 48.00
Requisitions 460.00
Benefits 316.40
1,276.40
1276.4 COGM
0.00
(1.4)*(8)+3.3*(12)+8.8*(12)+4*(6)+8.4*(12)+4*(12)+0.7*(8)+7*(12)+4.9*(8)+3.5*(12)
= 500 Total Wages Payable (Data Entry Cost)
4(8*1.5)
= 48 Over-Time Pay
(1.4)*(8)+3.3*(12)+8.8*(12)+4*(6)+8.4*(12)+0.7*(8)+7*(12)+4.9*(8)+3.5*(12)
= 452 Regular Pay
300+60+36+96+-32
= 460 Requisitions (DM)
2. Rather than the present costing system use data entry grades 1, 2 and 3 as separate cost pools to re-estimate the cost and markup of job 467. For each cost pool, include the (i) data entry rate (ii) fringes (iii) overtime (use the annual average overtime rate) and (iv) “other” overhead cost per hour to determine a total hourly cost rate for each of the three data entry categories.
Grade 1 Grade 2 Grade 3
Data Entry Rate 12.00 8.00 6.00
Fringes (0.7 x DER) 8.40 5.60 4.20
Overtime 0.40 0.40 0.40
Other OH 4.00 4.00 4.00
Total Hourly Cost Rate $24.80 $18.00 $14.60
3. Use 2007’s markup percentage (ie. the sales/production cost ratio) and apply it to the total of each of the three hourly cost rates, as determined in (3) for the three data entry categories. Quote a bid on 467 applying these new rates to 30 estimated hours of data entry grade one; 11 estimated hours of data entry grade 2; and 4 estimated hours of data entry grade 3 in a revised pricing bid (the actual hours are ≠ 45 estimated hours).
Total Hourly Cost Rate...