Question

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 154,000 $ 656,000 $ 5.00 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 $ 320 $ 220 33 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 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

Answer 1

	Part 1
	Fixed Manufacturing overhead cost	$                                      6,56,000
	Variable Manufacturing overhead cost($5.00*154,000)	$                                      7,70,000
	Total Manufacturing overhead cost	$                                    14,26,000
	Estimated machine hours	154000	hours
	Manufacturing overhead cost per machine hour	$                                             9.26	per MHs
	Part 2
	Direct Materials	$                                         320.00
	Direct labor	$                                         220.00
	Manufacturing overhead($9.36*33 hours)	$                                         305.57
	Total Manufacturing Cost	$                                              846
	Part 3
	Total Manufacturing Cost	$                                              846
	No. of units produced	50	units
	Unit Product cost($898/50)	$                                                17	per unit
	Part 4
	Unit Product cost	$                                                17
	Add:Markup(120% of $17)	$                                                20
	Selling price per unit	$                                                37