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:

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:

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 120% 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 153,000 Fixed manufacturing overhead cost $ 654,000 Variable manufacturing overhead cost per machine-hour $ 4.70

Explanation / Answer

Req 1. Pre-determined OH rate: Fixed Manufacturing OH per MH (654000/153000): 4.275 Variable Manufacturing OH per MH 4.7 OH rate per MH 8.975 Req 2: Total Manufacturing Cost for Job 400: Material 310 Labour 300 OH applied (36 MH @ 8.975) 323.1 Total Manufacturing Cost for Job 400: 933.1 Req 3: Unit product cost: Total Manufacturing cost: 933.1 Divide: Number of units 60 Unit product cost: 15.55 Req 4: Selling price per unit: Unit product cost: 15.55 Add: Markup @120% 18.66 Selling price per unit: 34.21

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