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Homework answers / question archive / Exercise 2-12 Computing Predetermined Overhead Rates and Job Costs [LO2-1, LO2-2, LO2-3) Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours
Exercise 2-12 Computing Predetermined Overhead Rates and Job Costs [LO2-1, LO2-2, LO2-3) 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 Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour 155,000 $ 653,000 $ 4.50 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 Direct labor cost Machine-hours used $ 360 $ 210 40 Compute the total manufacturing cost assigned to Job 400. 3. If Job 400 includes 50 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. Required 1 Required 2 Required 3 Required 4 Compute the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.) Predetermined overhead rate per MH
(1) computation of plantwide predetermined overhead rate
| Required machine hours | 155,000 |
| Variable manufacturing overhead per machine hour | $4.50 |
| Total Variable manufacturing overhead (155,000 hours*$4.50) | $697,500 |
| Fixed manufacturing overhead | $653,000 |
| Total manufacturing overhead | $1,350,500 |
| Machine hours | 155,000 |
|
Plantwide predetermined overhead rate= Total overhead/ Machine hours 1,350,500/155,000=$8.71 |
$8.71 |
(2) Job cost sheet
Job 400
| Direct materials | $360.00 |
| Direct labor | 210.00 |
| Manufacturing overhead ($8.71*40 hours) | 348.40 |
| Total manufacturing cost | 918.40 |
(3)
Total manufacturing cost assigned to job 400 = $918.40
Number of units include in job 400 = 50 units
Unit Product cost for this job = $918.40/50
= $18.37
(4)
Total manufacturing cost per unit = $18.47
Add: markup 120 % of total manufacturing cost (120 % of $18.47) = $22.16
Selling price per unit = $ 18.47 + $22.16
= $40.63
