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QUESTION

# The Beal Manufacturing Company's job costing system has two direct cost categories, direct materials and direct manufacturing labour.

The Beal Manufacturing Company's job costing system has two direct cost categories, direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labour-hours (DLH).  At the beginning of 2013, Beal adopted the following standards for its manufacturing costs based on production of 8,000 units:

Input Cost per  Output Unit

Direct materials3 kilograms at $5 per kilogram$    15

Direct manufacturing labour5 hours at $15 per hour 75 Manufacturing overhead: Variable Fixed$6 per DLH       30

Fixed Cost$8 per DLH 40 Standard manufacturing cost per output unit$160

The denominator level for total manufacturing overhead per month in 2013 is 40,000 direct manufacturing labour-hours. The records for January indicate the following:

Direct materials purchased25,000 kilograms for $130,000 Direct materials used23,100 kilograms Direct manufacturing labour40, 100 hours, at$14.60 per hour