1 answer

Exercise 2-12 Computing Predetermined Overhead Rates and Job Costs [LO2-1, LO2-2, LO2-3] Moody Corporation uses a...

Question:

Exercise 2-12 Computing Predetermined Overhead Rates and Job Costs [LO2-1, LO2-2, LO2-3]

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 151,000
Fixed manufacturing overhead cost $ 650,000
Variable manufacturing overhead cost per machine-hour $ 4.50

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 $ 390
Direct labor cost $ 210
Machine-hours used 30

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?


Answers

Solution: 1
CACLULATION OF OVERHEAD APPLICATION RATE PER MACHINE HOURS
Overhead Application Rate = Budgeted Fixed Manufacturing Overhead Cost   "/" Budgeted Machine Hours "=" Estimated Overhead rate PER Machine Hrs
Overhead Application Rate = $                       650,000 "/"                      151,000 "=" $                       4.30
Solution: 2
CALCULATION OF TOTAL MANUFACTURING COST ASSIGNED TO JOB 400
Job - 400
Direct Materials $                               390
Direct Labor Cost $                               210
Fixed Manufacturing overhead $                               129
(30 Hours X $ 4.30)
Total Manufacturing cost assigned to Job 400 $                               729
Solution: 3
CALCULATION OF COST PER UNIT FOR JOB 400
Total Manufacturing cost assigned to Job 400 $                               729
Divide by "/" By
No. of Units Produced 60 Units  
Cost Per Unit $                           12.15
Answer = $ 12.15 Per Unit
Solution: 4
Calculation of Selling Price Per Unit
Manufacturing Cost $                         729.00
Add: Mark-up 120% of Total Cost $                         874.80
Total Sales Value $                     1,603.80
Divide by "/" By
No. of Units Produced 60 Units  
Selling Price Per unit $                           26.73
Answer = Selling Price Per Unit = $ 26.73
.

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