(Solution) - Davison Company is to submit a bid on the production -(2025 Original AI-Free Solution)

Paper Details

Davison Company is to submit a bid on the production of 11,250 ceramic plates. It is estimated that the cost of materials will be $13,000 and the cost of direct labor will be $15,000. Factory overhead is applied at $2.70 per direct labor hour in the Molding Department and at 35% of the direct labor cost in the Decorating Department. It is estimated that 1,000 direct labor hours, at a cost of $9,000, will be required in Molding. The company wants a markup of 35% of its total production cost.
Required:
Determine the following:
(1) Estimated cost to produce
(2) Estimated prime cost
(3) Estimated conversion cost
(4) Bid price