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: Machine-hours required to support estimated production 153,000 Fixed manufacturing overhead cost $ 653,000 Variable manufacturing overhead cost per machine-hour $ 4.70 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: Direct materials $ 310 Direct labor cost $ 250 Machine-hours used 33 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 130% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

Explanation / Answer

1. Compute the plantwide predetermined overhead rate.

Plant wide overhead rate = 653000/153000 = 4.27+4.70 = 8.97 per machine hour

2.Compute the total manufacturing cost assigned to Job 400.

3. Unit cost = 856/60 = 14.27 per unit

4. Selling price = cost+markup

= 14.27+(14.27*130%)

Selling price = 32.82 per unit

Direct material 310 Direct labour 250 overhead applied (8.97*33) 296 Total manufacturing cost 856

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