Help Save & Opunul Corporation has two manufacturing departments-Molding and Fin

Question

Help Save & Opunul Corporation has two manufacturing departments-Molding and Finishing. The company used the following data at the beginning the year to calculate predetermined overhead rates: Estimated total machine-hours (MHs) 6,500 3, 500 Estimated total fixed manufacturing overhead cost 16,000 10,000 s 4,100 20,100 Estimated variable manufacturing overhead cost per 1.00 MH 2.00 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 AJob M Direct materials Direct labor cost $22,200 8,900 Molding machine hours Finishing machine- hours $15,300$9,000 2,5004,000 1,000 2,500

Explanation / Answer

Estimated variable manufacturing overhead = (6,500 machine hours * $1 per machine hour) + (3,500 machine hours * $2 per machine hour)

= $13,500

Total manufacturing overhead = Estimated variable manufacturing overhead + Estimated fixed manufacturing overhead

= $13,500 + $20,100

= $33,600

Predetermined overhead rate = Total manufacturing overhead / Total machine hours

= $33,600 / 10,000

= $3.36 per machine hour

Total costs for Job A = Direct materials + Direct labour + Overhead

= $15,300 + $22,200 + (5,000 machine hours * $3.36 per machine hour)

= $54,300

Selling price = $54,300 + ($54,300*30%)

= $70,590

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