QUESTION3 Cull Corporation uses a joborder costing system wi

QUESTION3 Cull Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $462,000, variable manufacturing overhead of $2.20 per machine-hour, and 60,000 machine-hours. The company has provided the following data concerning Job X455 which was recently completed: Number of units in job. 20 Total m Direct materials.... $940 Direct labor cost$1,448 The total job cost for Job x455 is closest to: 60 A $3.972 G B. $2.982 G C. $3.180 G D.$3.032

Solution

Ans.3 Option B $2982 *Calculation: Direct materials 940 Direct labor 1448 Manufacturing overhead applied 594 Total Job Cost for Job X455 2982 *Estimated total manufacturing overhead cost = Estimated total fixed cost + (Estimated variable cost per machine hour * Estimated Machine hours) 462000 + (2.20*60000) 594000 *Predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated Machine hours 594000 / 60000 9.9 per machine hour *Manufacturing overhead applied = Predetermined overhead rate * Machine hours incurred 9.9 * 60 594 Ans.4 Option C $614400 *Calculation: Break-even (dollar sales)   =   Fixed cost / Contribution margin ratio 351360 / 57.1875% 614400 *Contribution margin ratio = (Selling price per unit - variable cost per unit) / Selling price per unit * 100 (160 - 68.50) / 160 * 100 91.5 / 160 * 100 57.1875%