Opunui Corporation has two manufacturing departments--Molding and Finishing. The

Question

Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Finishing Total Estimated total machine-hours (MHs) 6500? 3500? 10,000? Estimated total fixed manufacturing overhead cost $ 11,000? $ 3600? $ 14,600? Estimated variable manufacturing overhead cost per MH $ 2.50? $ 5.00? During the most recent month, the company started and completed two jobs--Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials $ 14,700? $ 8500? Direct labor cost $ 21,800? $ 8300? Molding machine-hours 2500? 4000? Finishing machine-hours 2500? 1000? Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round "Predetermined overhead rate" to 2 decimal places.)

Opunui Corporation has two manufacturing departments-Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Finishing Total Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH 10,000 $14,600 6500 3500 11,000 3600 $2.505.00 During the most recent month, the company started and completed two jobs-Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials Direct labor cost Molding machine-hours Finishing machine-hours $ 8500 $ 21,800 8300 4000 1000 $14,700 2500 2500 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round "Predetermined overhead rate" to 2 decimal places.)

Explanation / Answer

Predetermined overhead rate = Estimated overhead/Estimated hours

= $14,600/10,000

= $1.46

Direct materials $ 14,700 Direct labor cost $ 21,800 Over head applied $    7,300 =(2500+2500)*1.46 Markup $ 17,520 =(14700+21800+7300)*40% Selling price of Job A $ 61,320

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