78120 22320 55800 87775 Opunui Corporation has two manufactu

$78,120

$22,320

$55,800

$87,775

Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates Molding 3,250 Total 5,000 $ 15,100 Finishing Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost 10,000 Estimated variable manufacturing overhead cost per $ 2.50 MH 1,750 $ 5,100 $ 5.00 During the most recent month, the company started and completed two jobs--Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials$16,400 $10,200 Direct labor cost $23,400 $10,000 Molding machine- hours Finishing machine- hours 1,250 2,000 500 1,250 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round your intermediate calculations to 2 decimal places.)

Solution

Total of variable and fixed manufacturing overheads = 15,100 + 16,875

= $31,975

Single plantwide manufacturing overhead rate = 31,975/5,000

= $6.395

Calculation of cost of Job A

Total manufacturing cost = $55,787.5

Markup = 40% on cost

= 55,787.5 x 40%

= 22,315

Selling price = Manufacturing cost + Markup

= 55,787.5 + 22,315

= $78,102

Hence correct option is (a)

	Molding	Finishing	Total
Total Fixed manufacturing overhead	$10,000	$5,100	$15,100
Variable manufacturing overhead per MH (i)	$2.50	$5
Machine hours (ii)	3,250	1,750	5,000
Total variable manufacturing overhead (i) x (ii)	$8,125	$8,750	$16,875