Calculate the cost and price of the order separating cost

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Question - Calculation of cost and price charged for an order of 200 pieces

The company has received an order for 200 pieces of clothing designed by the customer. It is estimated the order will take 240 direct labour hours (DLH) and 140 machine hours (MH). The company applies 60% mark-up on cost.

a) Calculate the cost and price of the order separating the cost into direct materials, direct labour and overhead cost (round to 2 decimal places), assuming the company used direct labour hours as the cost driver and the estimated cost of materials for this order is $2,400.

b) Calculate the cost and price of the order separating the cost into direct materials, direct labour and overhead cost (round to 2 decimal places), assuming the company used the number of pieces produced as the cost driver and the estimated cost of materials is the number of pieces multiplied by the average cost of materials per piece for the year 2019.

Reference no: EM132539907

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