Question - Simpson Manufacturing is a small clothing manufacturer using machine hours as the single cost driver to allocate manufacturing support costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Wautauga County School Uniform job.
Company Wautagua County Job
Direct materials $500,000 $1,000
Direct labour $60,000 $1,600
Manufacturing
Support costs $160,000
Markup 32%
Machine hours 40,000 600
Required:
A. Determine the amount of manufacturing support costs estimated for the Wautaga County job.
B. Determine the bid price for the Wautauga County's job.