Question

Exercise 2.12 C。mputing Predetermined Overhead Rates and Job Costs [LO2-1, L02-2, LO2-3] 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 Machine-hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour 155,000 $. 651,000 $4.50 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 Direct materials Direct labor cost Machine-hours used $ 370 $ 280 38 Compute the total manufacturing cost assigned to Job 400 3. If Job 400 includes 50 units, what is the unit product cost for this job? 4. If Moody uses a markup percentage of 130% of its total manufacturing cost, then what selling price per unit would it have established for Job 400? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.) Predetermined overhead rate per MH

Answer 1

1) predetermined overhead rate = $8.7

Explanation:

The estimated total manufacturing overhead cost is computed as follows:

Total manufacturing overhead = total fixed MOH + Total variable.MOH

= $651000 + ($4.5 × 155000)

= $651000 + $697500

= $1348500

The plantwide predetermined overhead rate is computed as follows:

Predetermined OH rate = estimated total Manufacturing OH ÷ estimated total machine hours

= $1348500/155000

= $8.7

2) total manufacturing cost = $981

Total manufacturing cost assigned to job 400 = direct labour + direct material + manufacturing OH applied

= $370 + $280 + (38 × $8.7)

= $370 + $280 + $330.6

= $981

3) unit product cost = $20

Unit product cost = total manufacturing cost / number of units in the job

= 981/50

= 19.62 ~ $20

4) selling price per unit = $45

Total manufacturing cost	$981
Markup (130% of man. cost)	$1275
Selling price for job 400 (a)	$2256
Number of units in job 400 (b)	50
Selling price per unit	$45

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