Question

Chapter 2: Applying Excel Data Markup on job cost 75% Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Milling Assembly 60,000 3,000 8,000 80,000 $390,000 $500,000 $2.00 $3.75 Cost summary for Job 407 Machine-hours Direct labor-hours Direct materials Direct labor cost Department Milling Assembly 90 20 $800 $370 $280 $70 Enter a formula into each of the cells marked with a ? below Assembly Step 1: Calculate the estimated total manufacturing overhead cost for each department Milling Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour or direct labor-hour Total machine-hours or direct labor-hours Total variable manufacturing overhead Total manufacturing overhead Step 2: Calculate the predetermined overhead rate in each department Milling Assembly Total manufacturing overhead Total machine-hours or direct labor-hours Predetermined overhead rate per machine-hour or direct labor-hour Assembly Step 3: Calculate the amount of overhead applied from both departments to Job 407 Milling Predetermined overhead rate per machine-hour or direct labor-hour Machine-hours or direct labor-hours for the job Manufacturing overhead applied Step 4: Calculate the total job cost for Job 407 Milling Assembly Total Direct materials Direct labor cost Manufacturing overhead applied Total cost of Job 407 ? Step 5: Calculate the selling price for Job 407 Total cost of Job 407 Markup Selling price of Job 407

Answer 1

Answer:

	Step-1:
		Milling	Assembly
(i)	Total fixed manufacturing overhead cost (given)	$          3,90,000	$          5,00,000
(ii)	Variable manufacturing overhead per machine hour or labor hour (given)	$                  2.00	$                   3.75
(iii)	Total machine hours or direct labor hours (given)	60,000	80,000
(iv)	Total variable manufacturing overhead (ii) × (iii)	$          1,20,000	$          3,00,000
(v)	Total manufacturing overhead (i) + (iv)	$          5,10,000	$          8,00,000
	Step-2:
		Milling	Assembly
(i)	Total manufacturing overhead (v) of Step-1	$          5,10,000	$          8,00,000
(ii)	Total machine hours or direct labor hours (given)	60,000	80,000
(iii)	Predetermined overhead rate per machine hour or direct labor hour (i) / (ii)	$                  8.50	$                10.00
	Step-3:
		Milling	Assembly
(i)	Predetermined overhead rate per machine hour or direct labor hour (iii) of Step-2	$                  8.50	$                10.00
(ii)	Machine hours or direct labor hours for the job (given)	90	20
(iii)	Manufacturing overhead applied (i) × (ii)	$                    765	$                    200
	Step-4:
		Milling	Assembly	Total
(i)	Direct material (given)	$                    800	$                    370	$          1,170
(ii)	Direct labor cost (given)	70	280	$              350
(iii)	Manufacturing overhead applied (iii) of Step-3	$                    765	$                    200	$              965
(iv)	Total cost of Job 407 (i) + (ii) + (iii)			$          2,485
	Step-5:
(i)	Total cost of Job 407 (iv) of Step-4	$          2,485.00
(ii)	Mark up (i) × 75/100	$          1,863.75
(iii)	Selling price of Job 407 (i) + (ii)	$          4,348.75