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Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
Molding Customizing Total
Estimated total machine-
hours (MHs) 9,000 3,600 12,600
Estimated total fixed
manufacturing overhead
cost $36,000 $13,320 $49,320
Estimated variable
manufacturing overhead
cost per MH $2.50 $3.00
During the most recent month, the company started and completed two jobs--Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow:
Job C Job M
Direct materials $16,700 $9,900
Direct labor cost $23,400 $10,300
Molding machine-hours 2,700 6,300
Customizing machine-hours 3,000 600
Required:
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 markup of 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M.

Respuesta :

anthougo

Answer:

Kluth Corporation

Calculation of the Selling price of:

                                                Job C          Job M

Direct materials                      $16,700         $9,900

Direct labor cost                    $23,400        $10,300

Total overhead costs            $37,650       $44,970

Total job cost                         $77,750        $65,170

20% Markup                            15,550           13,034

Selling prices                       $93,300       $78,204

Explanation:

a) Data and Calculations:

                                                           Molding         Customizing        Total

Estimated total machine- hours (MHs) 9,000              3,600           12,600

Estimated total fixed  manufacturing

overhead  cost                                 $36,000           $13,320       $49,320

Estimated variable  manufacturing

overhead  cost per MH                       $2.50               $3.00

Variable manufacturing overhead $22,500           $10,800       $33,300

Total manufacturing overhead      $58,500           $24,120       $82,620

Predetermined overhead rate        $6.50               $6.70

Jobs started and completed:      Job C          Job M

Direct materials                        $16,700        $9,900

Direct labor cost                      $23,400      $10,300

Molding machine-hours              2,700          6,300

Customizing machine-hours      3,000             600

Overhead costs:

Molding  (2,700 * $6.50)        $17,550      $40,950 (6,300 * $6.50)

Customizing (3,000 * $6.70) $20,100         $4,020 (600 * $6.70)

Total overhead costs            $37,650       $44,970

Total job cost                         $77,750        $65,170

20% Markup                            15,550           13,034

Selling price                         $93,300        $78,204

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