Question

TB Problem Qu. 2-277 Hultquist Corporation has two manufacturing .. Hultquist Corporation has two manufacturing departments-Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Forming Customizing 7,000 $25,900 $ 2.50 Total 10,000 $33, 100 Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH 358 3,000 $7,200 $ 5.00 During the period, the company started and completed two jobs-Job C and JobL. Data concerning those two jobs follow Job c $16,900 $10, 300 $23, 600 $10, 600 1,250 1,250 Job L Direct materials Direct labor cost Forming machine-hours Customizing machine-hours 5,750 1,750 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.) b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job L. (Do not round intermediate calculations.) c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job L. (Do not round intermediate calculations.) d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling price for Job L. (Do not round intermediate

Answer 1

a) Compute the Plantwide departmental pre-determined overhead rate: Description Amt Total estimated fixed manufacturing overheads $ 33,100 Variable manufacturing overheads: Forming: 7000 hrs x $2.50 Customizing: 3000 hrs x $5 S 32.500 Total estimated manufacturing overheads (A) S 65,600 Total estimated machine hours (B) 10,000 Pre-determined overhead rate (A/B) S6.56 b) Compute the total manufacturing overheads applied to Job L: Description | Job L Total Manufacutring Overheads applied: Forming: 5750 hrs x $6.56 Customizing: 1750 hrs x $6.56 S49,200 c) Compute the total manufacturing cost of Job L: $ $ Amt 10,300 10,600 Description Direct Material cost Direct labor cost Overheads: Forming 5750 hrs x $6.56 Customizing: 1750 hrs x $6.56 Total manufacutring cost $ S 49,200 70,100

d) Compute the Sales Price for Job L: $ $ Amt 10,300 10,600 Description Direct Material cost Direct labor cost Overheads: Forming: 5750 hrs x $6.56 Customizing 1750 hrs x $6.56 Total manufacutring cost Add: Mark up 20% on $70100 Selling Price S S $ S 49,200 70.100 14,020 84,120

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