Moody Corporation uses a job-order costing system with a plantwide predetermined

Question

Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Required:

1. Compute the plantwide predetermined overhead rate.

2. During the year, Job 400 was started and completed. The following information was available with respect to this job:

Compute the total manufacturing cost assigned to Job 400.

3. If Job 400 includes 52 units, what is the unit product cost for this job?

4. If Moody uses a markup percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

Machine-hours required to support estimated production 100,000 Fixed manufacturing overhead cost $ 650,000 Variable manufacturing overhead cost per machine-hour $ 3.00

Explanation / Answer

1) Predetermine overhead rate = (650000/100000)+3 = 9.50 per machine hour

2) Calculate total manufacturing cost :

3) Unit product cost = 1040/52 = 20 per unit

4) Selling price = 20+(20*120%) = 44 per unit

Direct material 450 Direct labour 210 Overhead (40*9.50) 380 Total manufacturing cost 1040

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