Question

The estimate Manufactured Overhead (MOH)costs for each category for the calendar year 2018 is listed below:

Activity Cost Pool	Estimate MOH Dollars
Maintenance	$420,000
Materials Handling	180,000
Setups	150,000
Inspection	$300,000

BSU Corporation is has been asked to submit bids for a proposed job. The facility manager for BSU expects the corporation to receive the bid which will also result in new jobs for the corporation.  
The proposal of a bid is usually manufacturing cost plus 30%. The estimates for the proposed job are as follows:

Direct Materials	$10,000
Direct Labor (750 hours)	$15,000
Number of material moves	8
Number of inspections	5
Number of setups	3
Number of machine-hours	300

The expected activity for the four activity cost pools that should be used are listed below:

Machine-hours	20,000
Material moves	4,000
Setups	200
Quality inspections	7,500

Based on the above data and the utilization of the ABC system, determine the dollar amount of the bid submitted by the company. (You are to enter the amount without any decimals. If you compute the answer to be $99,999.99 then you will enter 99,999. Do not round up nor round down. Do not enter a dollar sign. You are required to separate thousands with a comma)

Determine the bid amount which BSU Corporation will submit.

Answer 1

Calculate bid price

Activity	Expected overhead	Expected activity	Activity rate	Job Amount
Maintenance	420000	20000 Machine hour	21 per machine hour	21*300 = 6300
Materials Handling	180000	4000 Moves	45 per move	45*8 = 360
Setups	150000	200 Setups	750 per setup	750*3 = 2250
Inspection	300000	7500 per inspection	40 per inspection	40*5 = 200
Total overhead				9110
Direct material				10000
Direct labour				15000
Total manufacturing cost				34110
Bid price (34110*130%)				44343

So answer is $44343