Help Save &E he beginning of the year to calculate predetermined overhead rates:
ID: 2329131 • Letter: H
Question
Help Save &E he beginning of the year to calculate predetermined overhead rates: Machining Finishing Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost 26,500 13,500 Estimated variable manufacturing overhead cost 2.00 3.00 per MH Total 10,000 40,000 5,000 5,000 During the most recent month, the company started and completed two jobs-Job C and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job C Job L Direct materials 12,500 8,200 Direct labor cost $20,200 6,400 Machining machine- 3,400 1,600 hours Finishing machine- hours 3,000 2,000 Assume that the company uses departmental predetermined overhead rates with machine hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. The calculated selling price for Job C is closest to: (Round your intermediate calculations to 2 decimal places.) Prev 1 of 15 Next >Explanation / Answer
Predetermined overhead rate = Estimated fixed manufacturing overhead cost/Estimated machine hours
Machining department: $26500/5000 = $5.30 per MH
Finishing department: $13500/5000 = $2.70 per MH
Job C Direct materials 12500 Direct labor cost 20200 Variable manufacturing overhead cost: Machining (3400 x $2) 6800 Finishing (2000 x $3) 6000 Fixed manufacturing overhead cost: Machining (3400 x $5.30) 18020 Finishing (2000 x $2.70) 5400 Total manufacturing cost $ 68920 Markup (20% x $68920) 13784 Selling price $ 82704Related Questions
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