Question

Harnett Corporation has two manufacturing departments--Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates:

	Molding		Assembly		Total
Estimated total machine-hours (MHs)		6,000		4,000		10,000
Estimated total fixed manufacturing overhead cost	$	36,600	$	24,400	$	61,000
Estimated variable manufacturing overhead cost per MH	$	2.00	$	4.00

During the period, the company started and completed two jobs--Job E and Job M. Data concerning those two jobs follow:

	Job E		Job M
Direct materials	$	21,400	$	8,400
Direct labor cost	$	21,600	$	8,400
Molding machine-hours		2,700		3,300
Assembly machine-hours		400		3,600

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 E. (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 E. (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 20% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. (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 Molding department? (Round your answer to 2 decimal places.)

f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Assembly department? (Round your answer to 2 decimal places.)

g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job E? (Do not round intermediate calculations.)

h. 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 price for Job E. (Do not round intermediate calculations.)

Answer 1

	Molding
	Particluars	Amount
A	Estimated total fixed manufacturing overhead cost	36,600.00
B	Estimated variable manufacturing overhead cost (6000*2)	12,000.00
C	Estimated total manufacturing overhead cost	48,600.00
	Part A
	Assembling
	Particluars	Amount
A	Estimated total fixed manufacturing overhead cost	24,400.00
B	Estimated variable manufacturing overhead cost (4000*4)	16,000.00
C	Estimated total manufacturing overhead cost	40,400.00
A	Estimated total manufacturing overhead cost (49000+48600)	89,000.00
B	Estimated total Machine hours (6000+4000)	10,000.00
C	Predetermined Overhead rate (A*B)	8.90
	Part B
A	Predetermined Overhead rate	8.90
B	Total machine Hours incurred in Job E (2700+400)	3100
C	Manufacturing overhead applied to Job E (A*B)	27,590.00
	Part C
A	Direct Material	21,400.00
B	Direct Labour	21,600.00
C	Manufacturing overhead applied to Job E	27,590.00
D	Total manufacturing cost assigned to Job E (A+B+C)	70,590.00
	Part D
A	Total manufacturing cost assigned to Job E	70,590.00
B	Mark Up 20%	14,118.00
C	Selling price for Job E	84,708.00
	Part E -Molding dept
A	Estimated total fixed manufacturing overhead cost	36,600.00
B	Estimated variable manufacturing overhead cost (6000*2)	12,000.00
C	Estimated total manufacturing overhead cost (A+B+C)	48,600.00
D	Estimated total Machine hours	6,000
E	Departmental predetermined overhead rate in the Molding department	8.10
	Part F- Assembly Dept
A	Estimated total fixed manufacturing overhead cost	24,400.00
B	Estimated variable manufacturing overhead cost (4000*4)	16,000.00
C	Estimated total manufacturing overhead cost (A+B+C)	40,400.00
D	Estimated total Machine hours	4,000
E	Departmental predetermined overhead rate in the Assembly department	10.10
	Part G
A	Molding ( 8.10*2700)	21,870.00
B	Assembly (10.10*400)	4,040.00
C	Manufacturing overhead applied to Job E (A+B)	25,910.00
	Part H
A	Direct Material	21,400.00
B	Direct Labour	21,600.00
C	Manufacturing overhead applied to Job E	25,910.00
D	total manufacturing cost assigned to Job E (A+B+C)	68,910.00
E	Mark Up20%	13,782.00
	Selling price for Job E (D+E)	82,692.00