Question

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 Finishing Total
Estimated total machine-hours (MHs) 3,250 1,750 5,000
Estimated total fixed manufacturing overhead cost $13,000 $4,400 $17,400
Estimated variable manufacturing overhead cost per machine-hour $3.00 $6.00

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 $16,800 $10,100
Direct labor cost 23,500 10,400
Molding machine- hours 2500 4000
Pinishing machine- hours 2500 1000

Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machinne-hours. The total manufacturing cost assigned to Job M is closest to:___________

Answer 1

Answer:

Total cost= $58,150

Explanation:

Giving the following information:

Molding Finishing Total

Estimated total machine-hours (MHs) 5,000

Estimated total fixed manufacturing overhead cost  $17,400

Estimated total variable manufacturing overhead= (3*3,250 + 6*1,750)= $20,250

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (17,400 + 20,250) / 5,000

Predetermined manufacturing overhead rate= $7.53 per machine hour

Now, we can calculate the total cost:

Total cost= 10,100 + 10,400 + (7.53*5,000)

Total cost= $58,150