Moody Corporation uses a job-order costing system with a plantwide predetermined

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:

QUESTION: 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?

Machine-hours required to support estimated production 151,000 Fixed manufacturing overhead cost $ 656,000 Variable manufacturing overhead cost per machine-hour $ 5.00

Explanation / Answer

1) Predetermined overhead rate Formula: Estimated manufacturing overhead/estimated machine hours Variable manufacturing overhead cost per machine hour 5.00 Fixed manufacturing overhead cost per mh (656000/151000) 4.34 predetermined overhead rate 9.34 per MH 2) Total manufacturing cost $ Direct materials requistioned 310 Direct labor cost 300 Overhead applied (9.34*35MHrs) 326.90 Total manufacturing cost 937 selling price = 937*130% 1218.1 answer to get selling price per unit divide 1218 total selling price by units produced

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