Question

Kluth C beginning of the year to calculate predetermined overhead rates: tion has two manufacturing departments-Molding and Customizlng. The company used the following data at the 6,000 $15,000 1,200 7,200 Estimated total fixed manufacturing overhead cost $ 2.50 5.00 During the most recent month, the company started and completed two jobs-Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job C Job M $13,700 $7,700 $20,800 $7,600 2,500 3,500 200 1,000 Direct labor cost Customizing machine-hours Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M. (Do not round intermediate calculations.)

Answer 1

Calculation of selling prices for Job C and for Job M
	Job-C	Job-M
Direct Materials	$13,700.00	$7,700.00
Direct Labor	$20,800.00	$7,600.00
Molding Department
Variable Manufacturing Overheads ($2.50 per MH)	$6,250.00	$8,750.00
Fixed Manufacturing Overheads ($2.50 per MH)	$6,250.00	$8,750.00
Customising Department
Variable Manufacturing Overheads ($5.00 per MH)	$1,000.00	$5,000.00
Fixed Manufacturing Overheads ($3.80 per MH)	$760.00	$3,800.00
Total Cost of Jobs	$48,760.00	$41,600.00
Add : 20% Markup	$9,752.00	$8,320.00
Selling Price	$58,512.00	$49,920.00
Working
Calculation of Fixed Manufacturing overhead cost per machine hour
	Molding	Customising
Estimated Fixed Manufacturing overhead cost	$15,000.00	$4,560.00
/ Estimated total Machine hours	6000	1200
Fixed Manufacturing overhead cost per machine hour	$2.50	$3.80