Newcastle Machining produces parts for the steel industry
Newcastle Machining produces parts for the steel industry. It has 3 categories of overhead costs: machine operating costs, engineering and inspecting costs. The costs expected for these categories for the coming year are as follows: Machining $440,000 Engineering 220,000 Inspecting 180,000 Total 840,000 The plant currently uses machine hours to apply overhead. Expected capacity is 100,000 machine hours. Tom, the plant manager, has been asked to submit a bid on a potential job. He provides you with the following data for this job: Direct materials $8,000 Direct labour $12,000 Overhead $? Number of inspections 1 Number of machine hours 2,000 Engineering hours 10 Tom has been told that other firms will be competing for this job as well. Most…
Details