Question

The shepard company is to submit a bid on the production of 10,000 cermaic salad bowls....

The shepard company is to submit a bid on the production of 10,000 cermaic salad bowls. It's the estimated that the cost of materials will be $7,500 and direct labor of $10,000. Factory overhad is applied at $5 per direct labor hour in the molding department and at 120% of the direct labor cost in the finishing department. It is estimated that 800 direct labor hours hours will be required in molding and that direct labor cost in finishing will be $4,300. The company wishes a bid price consisting of mark up of 40% of its total production cost. Find 1) Estimated cost to produce 2) Estimated prime cost 3) Estimated conversion cost 4) Bid price

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Answer #1

1) Estimated cost to produce = $26,600

2) Estimated prime cost = $17,500

3) Estimated conversion cost = $9,160

4) Bid price = $ 37,324

Calculation Table =

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