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 158,000 Fixed manufacturing overhead cost $ 651,000 Variable manufacturing overhead cost per machine-hour $ 4.30 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 $ 300 Direct labor cost $ 240 Machine-hours used 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 110% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

Compute the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.)

	Predetermined overhead rate per MH

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

	Total manufacturing cost

If Job 400 includes 50 units, what is the unit product cost for this job? (Round your intermediate calculations and final answer to the nearest whole dollar.)

	Unit product cost

If Moody uses a markup percentage of 110% 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.)

	Selling price per unit

Answer 1

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

= ($4.30*158000+651000)/158000=$8.42 per MH

2) Calculation of Total manufacturing cost assigned to Job 400

Direct materials	$300
Direct labor	240
Manufacturing overhead applied (33*$8.42)	278
Total manufacturing cost	$818

3) Unit product cost= Total manufacturing cost/Number of units

= $818/50= $16 per unit

4) Calculation of Selling price per unit

Total manufacturing cost	$818
Markup ($818*110%)	900
Total selling price	$1718
/Number of units	50
Selling price per unit	$34 per unit