2 Opunui Corporation has two manufacturing departments-Molding and Finishing. Th

Question

2
Opunui Corporation has two manufacturing departments-Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: ota Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per ?? 6, 500 23,000 4,600 27, 6 3, 500 10,000 2.00 4.00 32 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 A Job M Direct materials $15,800 $9,500 Direct labor cost $22,800 9,400 Molding machine- hours Finishing machine- hours 2,500 4,000 1,000 2, 500 K Prev 12 of 47 Next>

Explanation / Answer

Answer

Predetermined overhead rate=total estimated manufacturing overhead / total estimated machine hours

Estimated variable manufacturing overhead = (6,500 * $2) + (3,500 ×$4)

=$27,000

Estimated fixed manufacturing overhead=$27,600

Estimated total manufacturing overhead = $54,600 (27,000 + 27,600)

Predetermined manufacturing overhead rate= $54,600 / 10,000 MH

=$5.46 per machine hour

Total machine hour used in job A = 2,500 Molding hours + 2,500 Finishing hours

=5,000 machine hours

Manufacturing Overhead Applied to Job A = 5,000 machine hours * $5.46 per machine hour

= $27,600

Selling price = $27,600 + 20%

= $32,760

Option B is correct.

2.

Contribution Margin per unit = Contribution Margin / No. of Units sold

= $75,400 / 5,000 Units

= $15 per unit

Contribution Margin of 5,300 Units = $15 per unit * 5,300 Units

Contribution Margin of 5,300 Units = $79,500

Option D is correct.

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