Homework SourseMoody Corporation uses a joborder costing system with a plan
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:
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:
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 110% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?
| Machine-hours required to support estimated production | 151,000 | |
| Fixed manufacturing overhead cost | $ | 657,000 |
| Variable manufacturing overhead cost per machine-hour | $ | 4.90 |
Solution
Answer to Part 1.
Predetermined Overhead Rate = Estimated Manufacturing Overhead / Estimated Machine Hour
Estimated Manufacturing Overhead = Fixed Manufacturing Overhead + Variable Manufacturing Overhead
Estimated Manufacturing Overhead = $657,000 + ($4.90 * 151,000)
Estimated Manufacturing Overhead = $657,000 + $739,900
Estimated Manufacturing Overhead = $1,396,900
Plantwide Predetermined Overhead rate = 1,396,900 / 151,000
Plantwide Predetermined Overhead rate = $9.25
Answer to Part 2.
Total Manufacturing Cost assigned to Job 400 = Direct Materials + Direct Labor + Manufacturing Overhead applied
Manufacturing Overhead applied = 33 * $9.25
Manufacturing Overhead applied = $305.25
Total Manufacturing Cost assigned to Job 400 = $310 + $230 + $305.25
Total Manufacturing Cost assigned to Job 400 = $845.25
Answer to Part 3.
Total Manufacturing Cost = $845.25
No. of Units in Job 400 = 50 Units
Unit Product Cost = 845.25 / 50
Unit Product Cost = $16.91
Answer to Part 4.
Total Manufacturing Cost = $845.25
Markup percentage = 110%
Selling Price for Job 400 = Total Manufacturing Cost + Markup
Selling Price for Job 400 = $845.25 + ($845.25 * 110%)
Selling Price for Job 400 = $845.25 + $929.78
Selling Price for Job 400 = $1,775.03
Selling Price per Unit = 1,775.03 / 50
Selling Price per Unit = $35.50
