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)		3,250		1,750		5,000
Estimated total fixed manufacturing overhead cost	$	19,000	$	4,300	$	23,300
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	$	15,400	$	9,200
Direct labor cost	$	22,400	$	9,100
Molding machine-hours		1,250		2,000
Finishing machine-hours		1,250		500

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 your intermediate calculations to 2 decimal places.)

Multiple Choice:

• $57,900

• $81,060

• $23,160

• $98,075

Answer 1

Estimated variable manufacturing overhead	16875	=(3250*2.5)+(1750*5)
Estimated total fixed manufacturing overhead	23300
Estimated total manufacturing overhead	40175
Divide by Estimated total machine-hours used	5000
Plantwide predetermined overhead rate	8.04	per MH
	Job A
Direct materials	15400
Direct labor cost	22400
Manufacturing overhead applied	20100	=(1250+1250)*8.04
Total manufacturing cost Job A	57900
Add: Markup @ 40%	23160
Selling price for Job A	81060
Option B $81,060 is correct