Question

TB Problem Qu. 2-272 Kluth Corporation has two manufacturing ... Kluth Corporation has two manufacturing departments-Moking and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (Mus) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per M1 Molding Customizing Total 7,099 2 ,400 9,409 $18,289 $ 9,600 $27,889 $ 1.50 $ 3.00 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-hours Customizing machine-hours Job C Job M $15,300 $9,000 $22,100 $9,100 2,500 4,500 1,400 1,000 Required: 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. 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

Answer 1

Molding overhead rate = (18200/7000+1.50) = 4.10 per MH

Customizing overhead rate = (9600/2400+3) = 7 per MH

Calculate selling price

	Job C	Job M
Direct material	15300	9000
Direct labor	22100	9100
Molding overhead	2500*4.10 = 10250	18450
Customizing overhead	1400*7 = 9800	7000
Total cost	57450	43550
Markup	11490	8710
Selling price	68940	52260