Modern Metalworks Company has two departments, milling and assembly. The company uses a job
costing system that employs a single, plantwide support cost driver rate to apply support costs to jobs
on the basis of direct labor hours. That is, the plantwide cost driver rate is computed by dividing
plantwide support costs by total plantwide direct labor hours. The following estimates are for October:
Support costs- Milling $120,000, Assembly $160,000 Direct Labor Hours- Milling, 8000, Assembly
12000 Machine Hours- 12000, Assembly 6000 The following information pertains to job 714, which
was started and completed during October: Direct Labor hours- Milling 10, Assembly 40 Machine
hours- Milling 18, Assembly 8 Direct materials costs- Milling $800, Assembly $50 Direct labor costs$100, Assembly $600 a. Prepare a job cost sheet for job 714 b. Assume next that instead of using a
single, plantwide support cost driver rate, the company uses machine hours as the cost driver for the
application of support costs in the milling department, and it uses direct labor hours as the cost driver
in the assembly department. Prepare a job cost sheet for job 714. c. Using the costs you computed in
(a) and (b), determine the bid price that Modern Metalworks will quote if it uses a 25% markup on
total manufacturing cost.
a
Job cost sheet 714
Direct Material
Direct labor
Factory overhead
Milling
800
100
Assmebly
50
600
700 (14 x 50 )
Total
850
700
700
Grand total
2250
Direct Material
Direct labor
Factory overhead
Milling
800
100
180 (10 x 18)
Assmebly
50
600
533 (40 x 13.33 )
Total
850
700
713
Grand total
2263
b
Job cost sheet 714
C
under a = 2250 z 1.25 = 2812.5
Under b = 2263 x 1.25 = 2828.75