Answer:
Selling Price for Job M = $49,005
Explanation:
Note: This question is incomplete and lacks necessary data to solve. But I have found similar question on the internet and will be using its data to solve this question for the sake of understanding and concept.
Data Missing:
Estimated Total Machine Hours for Molding = 9000
Estimated Total Machine Hours for Customizing = 3600
Total = 9000 + 3600 = 12,600
Estimated Total Fixed manufacturing overhead cost for Molding = 36000
Estimated Total Fixed manufacturing overhead cost for Customizing = 13,320
Total = 36000 + 13320 = 49320
Estimated variable Manufacturing overhead cost per MH for Molding = 2.50
Estimated variable Manufacturing overhead cost per MH for Customization = 3.00
Data For JOB M:
Direct materials = $9,900
Direct labor Cost = $10,300
Molding Machine-hours = 1300
Customizing Machine Hours = 600
Required:
We are asked to calculate the selling price for Job M:
Solution:
Direct materials = $9,900
Direct labor Cost = $10,300
Variable manufacturing overhead For Molding:
(Estimated variable Manufacturing overhead cost per MH for Molding 2.50 x Molding Machine-hours = 1300)
Molding = 2.50 x 1300
Molding = 3,250
Similarly,
Variable manufacturing overhead For Customizing:
(Estimated variable Manufacturing overhead cost per MH for Customization = 3.00 x Customizing Machine Hours = 600)
Customizing = 3.00 x 600
Customizing = 1800
Now, we need to find Fixed manufacturing overhead for both molding and customizing:
For Molding:
First we need to find the cost per machine hour for molding:
Molding Cost per machine hour = (Estimated Total Fixed manufacturing overhead cost for Molding = 36000 / Estimated Total Machine Hours for Molding = 9000)'
Molding Cost per machine hour = 36000/9000
Molding Cost per machine hour = $4 per machine hour
So,
Fixed manufacturing overhead for Molding:
Molding = Molding Cost per machine hour x Molding Machine-hours = 1300
Molding = 4 x 1300
Molding = 5200
Similarly,
For Customizing:
Customizing Cost per machine hour = 13320/3600
Customizing Cost per machine hour = $3.70 per machine hour
Fixed manufacturing overhead for Customizing:
Customizing = Customizing Cost per machine hour x Customizing Machine Hours
Customizing = $3.70 x 600
Customizing = 2220
Now, we need to find the total cost for Job M:
Total Cost = Direct materials + Direct labor Cost + Variable manufacturing overhead For Molding + Variable manufacturing overhead For Customizing + Fixed manufacturing overhead for Molding + Fixed manufacturing overhead for Customizing
Total Cost = $9,900 + $10,300 + 3,250 + 1800 + 5200 + 2220
Total Cost = $32,670
Now, we need to find the Selling price for Job M, for which we need to add the markup into the total cost.
Markup percentage = 50%
So,
Markup = Markup% x Total Cost
Markup = 0.50 x 32,670
Markup = $16,335
Selling Price = Markup + Total Cost
Selling Price for Job M = $16,335 + $32,670
Hence,
Selling Price for Job M = $49,005
