Conform Foam Products Produces Different Kinds of Industrial Packing Materials,all

question 99

Essay

Conform Foam Products produces different kinds of industrial packing materials,all in one manufacturing facility.They have identified four activities for their costing system:

Materials management-allocated by number of purchase orders
Chemical processing-allocated on metric tons
Molding-allocated on direct labor hours
Packaging-allocated by number of units produced
The activity rates are as follows:
$$\begin{array} { | l | r | l | } \hline \text { Materials management } & \$ 10.00 & \text { Per purchase order } \\\hline \text { Chemical processing } & \$ 6.50 & \text { Per metric ton } \\\hline \text { Molding } & \$ 23.50 & \text { Per direct labor hour } \\\hline \text { Packaging } & \$ 0.25 & \text { Per unit } \\\hline\end{array}$$
Engineering design shows that the order will require direct material worth $775,direct labor cost being $125,require 5 purchase orders to be placed,use 6 metric tons of chemical base,need 12 direct labor hours.The size of the order is to produce 5,000 units of product.Required:
(1)Calculate the overhead cost of the order.(2)Calculate total cost of production of the order.

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