Question

Koelsch Corporation has two manufacturing departments-Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates. Estimated total machine-hours (MH) Estimated total foxed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Molding Customia Total 1,000 9,000 10,000 $ 4000 $25,200 $ 29.200 $ 2.00 $ 3.00 During the most recent month, the company started and completed two jobs-Job F and job K. There were no beginning inventories. Data concerning those two jobs follow: Direct materials Direct labor cost Molding machine hours Customizing machine hours Job F Job $ 12,300 $ 8.400 $ 18,200 $ 6,800 700 300 3.600 5.400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for job is closest to $72,561 $48.374 524,187 $79,817

Answer 1

Question of Coates Corporation

Option B ($ 233.87) is the Correct Answer

Notes

Total Cost of Job = Direct Materials Cost + Direct Labour Cost + Manufacturing Overhead Cost

Direct Materials Cost = $ 5,500

Direct Labour Cost = $ 470

Manufacturing Overhead Cost = $ 3,025

Total Cost of Job = 5,500 + 470 + 3,025 = $ 8,995

Cost per Unit of Job = 8,995 / 50 Units

Cost per Unit of Job = $ 179.90

Selling Price per Units = 179.90 * 130%

Selling Price per Unit = $ 233.87

Additional Information

Manufacturing Overhead = 250 Hours * $ 12.1 per Hour = $ 3,025

Overhead Rate per Hour = Variable Overhead Rate per Hour + Fixed Overhead Rate per Hour

Fixed Overhead Rate per Hour = 249,000 / 30,000 Hours = $ 8.30

Overhead Rate per Hour = 8.3 + 3.8 = $ 12.10 per Hour

Question of Koelsch Corporation

Plantwide Overhead Rate = Total Estimated Manufacturing Overhead / Total Machine Hours

Total Machine Hours = 10,000 Hours

Total Manufacturing Overheads = $ 58,200

Plantwide Overhead Rate = 58,200 / 10,000

Plantwide Overhead Rate = $ 5.82 per Machine Hour

Notes

Fixed Manufacturing Overhead = $ 29,200

Variable Manufacturing Overhead for Molding = 1,000 Hours * $ 2 Per Hour = $ 2,000

Variable Manufacturing Overhead for Customising = 9,000 Hours * $ 3 per Hour = $ 27,000

Total Manufacturing Overheads = 29,200 + 2,000 + 27,000 = $ 58,200

Total Cost of Job k = Direct Materials Cost + Direct Labour Cost + Manufacturing Overhead

Total Cost of Job K = 8,400 + 6,800 + 33,174

Total Cost of Job K = $ 48,374

Notes

Manufacturing Overhead = 5,700 Machine Hours * $ 5.82 per Hour = $ 33,174

Bid / Selling Price for Job K = Total Job Cist for K * 150%

= 48,374 * 150%

= $ 72,561

Option A ($ 72,561) is the Correct Answer.