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 155,000 Fixed manufacturing overhead cost $656,000 Variable manufacturing overhead cost per $ 4.30 machine-hour 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 $260 Machine-hours used 40 Compute the total manufacturing cost assigned to Job 400. 3. If Job 400 includes 60 units, what is the unit product cost for this job? 4. If Moody uses a markup percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400? Complete this question by entering your answers in the tabs below. 4 Required Required Required Required 2 3 Compute the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.) Predetermined overhead rate per MH < Required 1 Required 2 >

Answer 1

Solution:

1.) Predetermined overhead rate = $8.53

Explanation:

The estimated total manufacturing overhead costs is computed as follows:

Estimated fixed manufacturing overhead	$656,000
Estimated variable manufacturing overhead ($4.30 × 155,000 hours )	$666,500
Estimated total manufacturing overhead costs	$1,322,500

The plantwide predetermined overhead rate is computed as follows:

Estimated total manufacturing overhead (a)	$1,322,500
Estimated total machine hours (b)	155,000
Predetermined overhead rate (a) ÷ (b)	$8.53

2.)

Total manufacturing cost assigned to job.400 is $901.

Explanation:

Direct materials	$300
Direct labor	$260
Manufacturing overhead applied ($8.53 × 40 hours)	$341
Total manufacturing cost	$901

3.)

Unit product cost for job 400 is $15.

Explanation:

Total manufacturing cost (a)	$901
Number of units in the job (b)	60 units
Unit product cost (a) ÷ (b)	$15 ($901 ÷ 60 units = $15.01 or $15)

4.)

Selling price per unit for job 400 is $33.

Total manufacturing cost	$901
Markup ($901 × 120%)	$1,081
Selling price for job 400 (a)	$1,982
Number of units in job 400 (b)	60 units
Selling price per unit (a) ÷ (b)	$33 ($1,982 ÷ 60 units )

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