2 Quiz 6 Shopping Cart | Fabletics Saved Help Save&Exit; Submit Sanderlin Corpor

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2 Quiz 6 Shopping Cart | Fabletics Saved Help Save&Exit; Submit Sanderlin Corporation has two manufacturing departments-Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Finishing Total Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost s 26,500 Estimated variable manufacturing overhead cost per s 2.00 MH 5,000 5,000 10,000 $ 13,500$40,000 12 During the most recent month, the company started and completed two jobs-Job C and Job L. There were no beginning inventories. Data concerning those two jobs follow Job C Job L Direct materials Direct labor cost $20,200 $6,400 Machining machine- hours Finishing machine- hours $12,500 8,200 3,400 1,600 3,000 2,000 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 m arkup of 20% on manufacturing cost to establish selling prices. The calculated selling price for Job C is closest to: (Round your intermediate calculations to 2 decimal places.)

Explanation / Answer

Fixed Overhead rate Machining :

Estimated Fixed manufacturing overhead = $26,500

Total Machine hours= 5,000

Overhead rate machining=$26,500/5000=$5.3

Fixed Overhead rate Finishing :

Estimated Fixed manufacturing overhead = $13,500

Total Machine hours= 5,000

Overhead rate Finishing=$13,500/5000=$2.7

Calculation of Selling Price of Job C

Direct Materials                                                $12,500

Direct labour cost                                              $20,200

Fixed manufacturing overhead-machining       $18,020

(3400*5.3)

Fixed manufacturing overhead-finishing            $5,400

(2000*2.7)

Variable manufacturing overhead-Machining    $6,800

(3400*2)

Variable manufacturing overhead-Finishing      $6,000

(2000*3)

                                                                        _________

Total Manufacturing cost                                $68,920

Add :20% mark up                                          $13,784

                                                                      ________

Selling Price                                                  $82,704

                                                                      =======

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