Tancredi Corporation has two manufacturing departments--Machining and Customizin

Question

Tancredi Corporation has two manufacturing departments--Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

During the most recent month, the company started and completed two jobs--Job E and Job J. There were no beginning inventories. Data concerning those two jobs follow:

Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. If both jobs are sold during the month, the company's cost of goods sold for the month would be closest to:

A. $102,600

B. $110,808

C. $41,150

D. $61,450

Molding Customizing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 22,000 $ 11,500 $ 33,500 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 3.00

Explanation / Answer

A.$102,600.

first let us calculate the predetermined overhead rate:

now,

cost of goods sold:

total fixed manufacturing cost $33,500 total variable manufacturing cost ($1.80*5,000) +(3*5,000) 24,000 total manufacturing overhead $57,500 number of machine hours 10,000 predetermined overhead rate ($57,500 / 10,000) $5.75

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