Question

Opunul Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Estimated total machine-hours (MHS) 6,500 Estimated total fixed manufacturing overhead cost $ 16,000 Estimated variable manufacturing overhead cost per $ 1.00 Finishing 3,500 $ 4,100 $ 2.00 Tota. 10,000 $ 20,100 During the most recent month, the company started and completed two jobs --Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Direct materials Direct labor cost Molding machine-hours Finishing machine-hours Job A $ 15,300 $ 22,200 2,500 2,500 Job M $9,000 $8,900 4,000 1,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine- hours and uses a markup of 30% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round "Predetermined overhead rate" to 2 decimal places.) Multiple Choice 0 $54,300 $87,900 o $16,290 o

Answer 1

Estimated variable manufacturing overhead cost per machine hour in Molding department = $1

Estimated machine hour in molding department = 6,500

Estimated total fixed manufacturing cost in molding department = $16,000

Total estimated manufacturing overhead in molding department = Estimated variable manufacturing overhead cost per machine hour in Molding department x Estimated machine hour in molding department + Estimated total fixed manufacturing cost in molding department

= 1 x 6,500 + 16,000

= $22,500

Estimated variable manufacturing overhead cost per machine hour in Finishing department = $2

Estimated machine hour in Finishing department = 3,500

Estimated total fixed manufacturing cost in Finishing department = $4,100

Total estimated manufacturing overhead in Finishing department = Estimated variable manufacturing overhead cost per machine hour in Finishing department x Estimated machine hour in Finishing department + Estimated total fixed manufacturing cost in Finishing department

= 2 x 3,500 + 4,100

= $11,100

Total estimated manufacturing overhead = Total estimated manufacturing overhead in molding department + Total estimated manufacturing overhead in Finishing department

= 22,500+11,100

= $33,600

Total estimated machine hours = 10,000

Predetermined overhead rate = Total estimated manufacturing overhead / Total estimated machine hours

= 33,600/10,000

= $3.36 per machine hours

Total machine hours used in Job A = 2,500+2,500

= 5,000

Overhead applied to Job A = Total machine hours used in Job A x Predetermined overhead rate

= 5,000 x 3.36

= $16,800

Total cost of Job A = Direct materials + Direct labor + Manufacturing overhead

= 15,300+22,200+16,800

= $54,300

Mark up = 30% on Cost

= 54,300 x 30%

= $16,290

Selling price of Job A = Total cost of Job A + Mark up

= 54,300+16,290

= $70,590

Kindly comment if you need further assistance. Thanks‼!