Question

Hultquist Corporation has two manufacturing departments-Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Estimated total machine-hours (MHS) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Forming 5,000 $10,500 $ 2.00 Customizing 5,000 $15,000 $ 4.00 Total 10,000 $25,500 During the period, the company started and completed two jobs-Job C and Job L. Data concerning those twojobs follow: Direct materials Direct labor cost Forming machine-hours Customizing machine-hours Job C Job L $16,200 $9,500 $ 22,900 $9,900 2,700 2,300 400 4,600 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.) b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job L. (Do not round intermediate calculations.) c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job L. (Do not round intermediate calculations.) d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 80% on manufacturing cost to establish selling prices Calculate the selling price for Job L. (DO not round intermediate calculations.) e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Forming department? (Round your answer to 2 decimal places.) f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation

Answer 1

Given, Molding Trimming $ $ OH costs 20,500 35,000 DLH 5,000 5,000 a. Predetermined OH Rate- MH Total Overhead Cos $10,500+($2.00*5,000)+$15,000+(4.00*5,000) $ 55,500 $5.55 Total Machine Houi 5,000 + 5,000 MH 10,000 b. Particulars Job L Manufacturing Overhead Applied $ 38,295 [$5.55*6,900MH] с *Total Manufacturing cost = Direct Material + Direct Labor + Overhead Cost Particulars Job L Direct Material $ 9,500 Direct Labor $ 9,900 Overhead $ 38,295 Total Manufacturing cost $ 57,695 d Job L Particulars Total Manufacturing cost Markup - 80% Selling Price per Unit $ $ $ 57,695 46,156 103,851

e $ $ 4.10 MH Forming Predetermined OH Rate- Total Overhead Cos $10,500+($2.00*5,000) Total Machine Hou: 5,000 MH 20,500 5,000 f 7.00 MH Customizing Predetermined OH Rat Total Overhead Cos $15,000+($4.00*5,000) Total Machine Hou: 5,000 MH 35,000 5,000 g Particulars Direct Material Direct Labor Overhead-Molding Overhead-Fabrication Total Manufacturing cost $ $ $ $ $ Job L 9,500 9,900 12,710 [$4.10*3,100MH]; 48,300 [$7.00*6,900MH]; 80,410 h Cost-plus pricing=Total Manufacturing cost+Markup Particulars Job L Total Manufacturing cost $ 80,410 Markup - 80% $ 64,328 Selling Price $ 144,738

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