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		100,000
Fixed manufacturing overhead cost	$	650,000
Variable manufacturing overhead cost per machine-hour	$	3.00

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	$	450
Direct labor cost	$	210
Machine-hours used		40

Compute the total manufacturing cost assigned to Job 400.

3. If Job 400 includes 52 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?

1. Compute the plantwide predetermined overhead rate.

2.Compute the total manufacturing cost assigned to Job 400. (Round intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

3.If Job 400 includes 52 units, what is the unit product cost for this job? (Round your intermediate calculations and final answer to the nearest whole dollar.)

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? (Round your intermediate calculations and final answer to the nearest whole dollar.)

Answer 1

Ans. 1	Predetermined overhead rate = Total Estimated overhead cost / Estimated machine hours
		$950,000 / 100,000
		$9.50	per machine hour
	*Calculations:
	*Variable manufacturing overhead = Variable overhead cost per machine hour * Machine hours required
		$3 * 100,000
		$300,000
	*Total estimated overhead cost = Variable manufacturing overhead + Fixed manufacturing overhead
		$300,000 + $650,000
		$950,000
Ans. 2	Particulars	Amount
	Direct materials	$450.00
	Direct labor cost	$210.00
	Overhead applied	$380.00
	Total manufacturing cost	$1,040.00
	*Calculations:
	Overhead cost applied = Predetermined overhead rate * Machine hours used
		$9.50 * 40
		$380
Ans. 3	Unit product cost = Total manufacturing cost / Units produced
		$1,040 / 52
		$20.00	per unit
Ans. 4	Total Selling price = Total manufacturing cost * Markup percentage
	$1,040 * 120%
	$1,248
	Selling price per unit = Total selling price / Units produced
	$1,248 / 52
	$24 per unit