Question

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 157,000 Fixed manufacturing overhead cost $ 658,000 Variable manufacturing overhead cost per machine-hour $ 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 $ 350 Direct labor cost $ 240 Machine-hours used 31 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

Answer 1

Answer:

Instructions are below.

Explanation:

Giving the following information:

Machine-hours required to support estimated production 157,000 Fixed manufacturing overhead cost $ 658,000

Variable manufacturing overhead cost per machine hour $4.50

To calculate the estimated manufacturing overhead rate we need to use the following formula:

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

Estimated manufacturing overhead rate= (658,000/157,000) + 4.5

Estimated manufacturing overhead rate= $8.69 per machine hour

Job 400:

Direct materials= $350

Direct labor cost= $240

Machine-hours used= 31

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 8.69*31= $269.39

Job 400:

Units= 50

First, we need to calculate the total cost:

Total cost= 350 + 240 + 269.39

Total cost= $859.39

Unitary cost= 859.39/50= $17.188 per unit