Lawrence Plastics manufactures custom park furniture and signage from recycled plastics (primarily shredded milk jugs). Many of the company's customers are municipalities that are required by law to purchase goods that meet certain recycled-content guidelines. (Recycled-content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials). As a result, Lawrence includes two types of direct material charges in its job cost for each job: (1) virgin materials (non-recycled), and (2) recycled-content materials. The company also keeps track of the pounds of each type of direct material so that the final recycled-content percentage for the job can be reported to the customer. Lawrence also reports on the percentage of recycled-content as a total of total plastic used each month in its own internal reporting system to help to encourage managers to userecycled-content whenever possible. Lawrence Plastics uses a predetermined manufacturing overhead rate of $8 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Jefferson County: Description Quantity Cost Virgin materials 80 pounds $3.80 per pound Recycled-content materials 120 pounds $3.40 per pound Direct labor 14 hours $13.00 per hour Requirements: 1. Calculate the total cost of the Jefferson County job. 2. Calculate the percentage of recycled content used in the Jefferson County job (using pounds). If items purchased by Jefferson County are required by county charter to contain at least 50% recycled content, does this job meet that requirement?
Lawrence Plastics manufactures custom park furniture and signage from recycled plastics (primarily shredded milk jugs). Many of the company's customers are municipalities that are required by law to purchase goods that meet certain recycled-content guidelines. (Recycled-content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials). As a result, Lawrence includes two types of direct material charges in its job cost for each job: (1) virgin materials (non-recycled), and (2) recycled-content materials. The company also keeps track of the pounds of each type of direct material so that the final recycled-content percentage for the job can be reported to the customer. Lawrence also reports on the percentage of recycled-content as a total of total plastic used each month in its own internal reporting system to help to encourage managers to userecycled-content whenever possible. Lawrence Plastics uses a predetermined manufacturing overhead rate of $8 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Jefferson County: Description Quantity Cost Virgin materials 80 pounds $3.80 per pound Recycled-content materials 120 pounds $3.40 per pound Direct labor 14 hours $13.00 per hour Requirements: 1. Calculate the total cost of the Jefferson County job. 2. Calculate the percentage of recycled content used in the Jefferson County job (using pounds). If items purchased by Jefferson County are required by county charter to contain at least 50% recycled content, does this job meet that requirement?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter1: Introduction To Managerial Accounting
Section: Chapter Questions
Problem 2E: Indicate whether the following costs of Procter Gamble (PG), a maker of consumer products, would be...
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Question
Lawrence Plastics manufactures custom park furniture and signage from recycled plastics (primarily shredded milk jugs). Many of the company's customers are municipalities that are required by law to purchase goods that meet certain recycled-content guidelines. (Recycled-content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials). As a result, Lawrence includes two types of direct material charges in its job cost for each job: (1) virgin materials (non-recycled), and (2) recycled-content materials.
|
The company also keeps track of the pounds of each type of direct material so that the final recycled-content percentage for the job can be reported to the customer. Lawrence also reports on the percentage of recycled-content as a total of total plastic used each month in its own internal reporting system to help to encourage managers to userecycled-content whenever possible. Lawrence Plastics uses a predetermined manufacturing
$8 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Jefferson County:
|
|
Description
|
Quantity
|
Cost
|
|---|---|---|
|
Virgin materials
|
80 pounds
|
$3.80 per pound
|
|
Recycled-content materials
|
120 pounds
|
$3.40 per pound
|
|
Direct labor
|
14 hours
|
$13.00 per hour
|
Requirements:
|
1.
|
Calculate the total cost of the Jefferson County job. |
|
2.
|
Calculate the percentage of recycled content used in the
Jefferson County job (using pounds). If items purchased by
Jefferson County are required by county charter to contain at least 50% recycled content, does this job meet that requirement?
|
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