Lotz Corporation has two manufacturing departments-Casting and Finishing. The co

Question

Lotz Corporation has two manufacturing departments-Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Finishing Total Estimated total machine-hours (MHs) 2,000 8,000 10,000 Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH 1.20 $10,200 $19,200 $29,400 2.20 During the most recent month, the company started and completed two jobs-Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow Job F Job K 14,400 $7,100 $22,500 $6,600 1,400 600 Finishing machine-hours 3,200 4,800 Direct materials Direct labor cost Casting machine-hours Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job F is closest to: (Round your intermediate calculations to 2 decimal places.)

Explanation / Answer

Casting department rate = (10200/2000)+1.20 = 6.30 per machine hour

Finishing department rate = (19200/8000)+2.20 = 4.60 per machine hour

Calculate selling price of job F :

Job F Direct material 14400 Direct labour 22500 Casting overhead (1400*6.3) 8820 Finishing overhead (3200*4.6) 14720 Total manufacturing cost 60440 Markup 60440 Selling price of Job F 120880

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.