Question

Item5 1.25 points eBookPrintReferencesCheck my workCheck My Work button is now enabledItem 5 Exercise 2-12 Computing Predetermined Overhead Rates and Job Costs [LO2-1, LO2-2, LO2-3] 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 155,000 Fixed manufacturing overhead cost $ 654,000 Variable manufacturing overhead cost per machine-hour $ 4.40 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 $ 390 Direct labor cost $ 230 Machine-hours used 36 Compute the total manufacturing cost assigned to Job 400. 3. If Job 400 includes 60 units, what is the unit product cost for this job? 4. If Moody uses a markup percentage of 130% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?\

Answer 1

Answer:

Follows are the solution to the given points:

Explanation:

 In point 1:

The pre-determined overhead rate value:

$= (\frac{654,000}{155,000})+4.40 \\\\= 4.21+4.40\\\\= \ 8.61 / MH$

In point 2:

Calculating the total manufacturing cost:

$\text{Direct material} \to 390\\\\\text{Direct labor} \to 230\\\\\text{Manufacturing overhead} (36 \times 8.61) \to 309.96\\\\\text{Total manufacturing cost}\to 929.96$

In point 3:

The unit product cost:

$= \frac{929.96}{60}\\\\ = \ 15.49 / unit$

In point 4:

Calculating the selling price per unit:

$= \ 15.49+(\ 15.49 \times 130\%)\\\\ =\ 15.49 + 20.137 \\\\ = \ 35.627 \approx \ 36 / unit$