Question

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: Estimated total machine-hours (MHS) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Cac tugingement and stoper ME Forming Customizing 4,000 6,000 $ 8,000 $15,000 $ 3.00 $ 6.00 Total 10,000 $23,000 During the period, the company started and completed two jobs--Job C and Job L. Data concerning those two jobs follow: Direct materials Direct labor cost Forming machine-hours Customizing machine-hours Job C $16,000 $22,700 1,250 1,250 Job L $9,400 $9,700 2,750 4,750

Answer 1

a) Plantwide predetermined manufacturing overhead rate= Estimated total manufacturing overhead/Estimated total machine hours

= (4000*$3+6000*$6+$23000)/10000

= $7.10 per machine hour

b) Manufacturing overhead applied to Job L= Total machine hours*Plantwide predetermined manufacturing overhead rate

= (2750+4750)*$7.10= $53250

c) Calculation of Total manufacturing cost assigned to Job L

Direct materials	$9400
Direct labor	9700
Manufacturing overhead applied	53250
Total manufacturing costs	$72350

d)

Total manufacturing costs	$72350
Add: Markup (72350*80%)	57880
Selling price	$130230

e) Predetermined overhead rate in the Forming Department= Estimated total manufacturing overhead/Estimated total machine hours

= (4000*$3+$8000)/4000

= $5 per machine hour

f) Predetermined overhead rate in the Customizing Department= Estimated total manufacturing overhead/Estimated total machine hours

= (6000*$6+15000)/6000

= $8.5 per machine hour

g) Total manufacturing overhead applied to Job L= (2750*$5)+(4750*$8.5)= $54125

h) Calculation of selling price

Direct materials	$9400
Direct labor	9700
Manufacturing overhead applied	54125
Total manufacturing costs	$73225
Add: Markup (73225*80%)	58580
Selling price	$131805