Zippo manufactures one type of product and uses normal costing and a plant-wide rate based on direct labor hours to apply overhead for costing purposes. Each product is designed based on customer specifications. The following budget information was been obtained for the coming year. Quantity produced 20,000 Direct labor hours 40,000 Manufacturing overhead $2,000,000
1. Determine the plant-wide overhead allocation rate
2. Zippo recently received an order with the following details.
Quantity 250 Direct material $ $52,700
Direct labor $ $18,600
Direct labor hours 600
Determine the total and per-unit costs for the order using the normal costing.
3. Prepare the journal entry to record the charges to work-in-process for this order.
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