Determination of Overhead Rate
Response to the following problem:
Wolf Creek Industries produces custom uniforms. The company uses machine hours to allocate manufacturing overhead costs to jobs. The following yearly information was compiled for Wolf Creek:
Direct materials $245,000
Direct labour $325,000
Manufacturing overhead $454,000
Machine hours 45,000
During the year, Wolf Creek completed a job for Carston College's cheerleading team; details areas follows:
Direct materials cost per uniform $35
Direct labour cost per uniform $38
Total machine hours per uniform 3.5
Total number of uniforms sold 65
a. What is the manufacturing overhead rate used by Wolf Creek?
b. What is the cost of making one uniform for Carston College?
c. What is the total cost of the Carston College job?