sexyshelia Posts: 3, Reputation: 1 New Member   #1 Feb 22, 2012, 09:09 PM

Computing Normal costing A pizza company in its first year of operations estimates they will produce 346,125 pizzas but actually produced 336,033 pizzas. Direct material costs were $248,664, direct labor cost $840,082 for 84,008 hours worked. Estimated overhead cost for year was $191,700 while actual overhead was $193,000. Material cost (per pizza): dough shells $.12, sauce package .20, cheese package .08, meat package .30, assembly package .o4. Labor costs (estimated): direct labor rate $7.50 $2.50 per hour in fringe benefits, indirect labor (per month): supervisor (including fringe benefits) $3,000, other direct labor (including fringe benefits) $2,000. Overhead cost (estimated per month): rent on production facility $1,000, utilities $1,475, other overhead: indirect material $2,500, maintenance cost $1,500, quality inspection costs $2,000, equipment (lease costs) $2,500. Selling & administrative costs (estimate, per month): administrative salaries $4,000, salaries of sales staff $5,000, product promotion and admin $2,000, rent on office space for staff $2,000, utilities and insurance $500, lease of office furniture $800. How do compute the cost of the $336,033 pizzas using normal costing for the 1st year? Also what would be the best cost driver for allocating overhead to pizzas? Thanks for any help. I have been trying to work this for almost to days and it just isn't coming out rightl

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