Kluth Corporation has two manufacturing departments-Molding and Customizing. The

Question

Kluth Corporation has two manufacturing departments-Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates Molding Customizing Total Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH 11,000 $38,500 $ 3.00 3,700 14,700 $14,430 $52,930 $ 5.00 During the most recent month, the company started and completed two jobs--Job C and Job M. There were no beginning inventories Data concerning those two jobs follow Direct materials Direct labor cost Molding machine-hou Customizing machine-hours Job C Job M $16,800 $10,100 $23,500 $10,400 2,500 8,500 2,700 1,000 Required Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in botlh production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices Calculate the selling prices for Job C and for Job M. (Do not round intermediate calculations.) Selling price for Job C Selling price for Job M

Explanation / Answer

Selling price= manufacturing costs*120%

Selling price for Job C = 80,580*120%=$96,696

Selling price for Job M =84,650*120%=$101,580

Molding customizing Estimated total fixed manufacturing Overhead cost 38500 14430 Estimated total machine hours 11000 3700 Fixed manufacturing Overhead rate 3.50 3.90

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