Question

Saved Help TB Problem Qu. 2-272 Kluth Corporation has two manufacturing ... Kluth 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 (MHS) Estimated total fixed manufacturing overhead cost Estimated variable nanufacturing overhead cost per MH Molding Customizing Total 14,000 2,900 16,900 $35,000 $8,990 $43,990 $ 2.00 $ 6.00 01:19:03 During the most recent month, the company started and completed two jobs-Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow: Direct materials Direct labor cost Molding machine-hours Customizing machine-hours Job C Job M $ 16,000 $ 9,400 $22,700 $ 9,700 1,250 12,750 2,400 500 Required: Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M. (Do not round intermediate calculations.) Selling price for Job C Selling price for Job M

Answer 1

Computation of Fixed OH per hour : Molding ($ 35,000 / 14,000) Customizing ($ 8,990 / 2,900) 2.50 $ $ 3.10 $ $ Job C Job M 16,000 $ 9,400 22,700 $ 9,700 $ 2,500 $ 25,500 $ 14,400 $ 3,000 Direct Material Direct Labor Cost Variable Molding Overhead: Job C ( 1250 x $ 2) JobM (12750 x $ 2) Variable Customizing Overhead : Job C ( 2400 x $ 6) JobM (500 x $ 6) Fixed Molding Overhead : Job C (1250 x $ $2.5) Job M (12750 x $ 2.5) Fixed Customizing Overhead : Job C (2400 x $ 3.1) JobM ( 500 x $ 3.1) Total Manufacturing costs Mark up @ 20% Selling Price per Job $ 3,125 $ 31,875 $ $ $ $ 7,440 $ 66,165 $ 13,233 $ 79,398 $ 1,550 81,025 16,205 97,230 Selling Price for Job C Selling price for Job M $ $ 79,398 97,230

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