Question
In: Accounting
1. Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at...
1. 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) | 14,000 | 1,800 | 15,800 | |||
| Estimated total fixed manufacturing overhead cost | $ | 35,000 | $ | 5,040 | $ | 40,040 |
| Estimated variable manufacturing overhead cost per MH | $ | 2.00 | $ | 4.00 | ||
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 | $ | 14,700 | $ | 8,400 | ||
| Direct labor cost | $ | 21,600 | $ | 8,400 | ||
| Molding machine-hours | 2,700 | 11,300 | ||||
| Customizing machine-hours | 1,200 | 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. (Do not round intermediate calculations.)
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2. Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:
| Forming | Customizing | Total | ||||
| Estimated total machine-hours (MHs) | 5,000 | 5,000 | 10,000 | |||
| Estimated total fixed manufacturing overhead cost | $ | 17,500 | $ | 17,000 | $ | 34,500 |
| Estimated variable manufacturing overhead cost per MH | $ | 1.50 | $ | 3.00 | ||
During the period, the company started and completed two jobs--Job C and Job L. Data concerning those two jobs follow:
| Job C | Job L | |||||
| Direct materials | $ | 14,500 | $ | 8,200 | ||
| Direct labor cost | $ | 21,400 | $ | 8,200 | ||
| Forming machine-hours | 1,250 | 3,750 | ||||
| Customizing machine-hours | 1,250 | 3,750 | ||||
Required:
a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.)
b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job L. (Do not round intermediate calculations.)
c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job L. (Do not round intermediate calculations.)
d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling price for Job L. (Do not round intermediate calculations.)
e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Forming department? (Round your answer to 2 decimal places.)
f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Customizing department? (Round your answer to 2 decimal places.)
g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job L? (Do not round intermediate calculations.)
h. 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 price for Job L. (Do not round intermediate calculations.)
Solutions
Expert Solution
| 1 | Departmental predetermined overhead rates=Total manufacturing overhead cost for the department/Total machine hours for the department | ||||||||
| Total manufacturing overhead cost: | |||||||||
| Molding | Customizing | ||||||||
| Estimated total machine-hours | a | 14000 | 1800 | ||||||
| Estimated total fixed manufacturing overhead cost | b | 35000 | 5040 | ||||||
| Estimated variable manufacturing overhead cost | c | 28000 | 7200 | ||||||
| (Oh cost per machine hour*Machine hours) | (14000*2) | (1800*4) | |||||||
| Total manufacturing overhead cost | d=b+c | 63000 | 12240 | ||||||
| Departmental predetermined overhead rates | d/a | 4.5 | 6.8 | ||||||
| Manufacturing overhead applied=Departmental predetermined overhead rate*Machine hours in the department | |||||||||
| Selling price for Job: | |||||||||
| Job C | Job M | ||||||||
| Direct materials | 14700 | 8400 | |||||||
| Direct labor cost | 21600 | 8400 | |||||||
| Manufacturing overhead applied | |||||||||
| Molding | 12150 | 50850 | |||||||
| (4.5*2700) | (4.5*11300) | ||||||||
| Customizing | 8160 | 4080 | |||||||
| (6.8*1200) | (6.8*600) | ||||||||
| Total costs for the job | 56610 | 71730 | |||||||
| Add: markup at 20% | 11322 | 14346 | |||||||
| Selling price | 67932 | 86076 | |||||||
| 2 | |||||||||
| a. | Plantwide predetermined manufacturing overhead rate=Total fixed manufacturing overhead/Total machine hours | ||||||||
| Forming | Customizing | Total | |||||||
| Estimated total machine-hours | a | 5000 | 5000 | 10000 | |||||
| Estimated total fixed manufacturing overhead cost | b | 17500 | 17000 | 34500 | |||||
| Estimated variable manufacturing overhead cost | c | 7500 | 15000 | 44500 | |||||
| (OH cost per machine hour*Machine hours) | (5000*1.5) | (5000*3) | |||||||
| Total manufacturing overhead cost | d=b+c | 25000 | 32000 | 57000 | |||||
| Plantwide predetermined overhead rate | d/a | 5.7 | |||||||
| b. | Manufacturing overhead applied to Job L=Machine hours in job L*Plantwide PDOH rate=(3750+3750)*5.7=$ 42750 | ||||||||
| c. | Total manufactring cost to Job L: | ||||||||
| $ | |||||||||
| Direct materials | 8200 | ||||||||
| Direct labor cost |
 ekkarill92 answered 2 years agoRelated SolutionsKluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the...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)
6,000
2,300
8,300
Estimated total fixed manufacturing overhead cost
$
15,000
$
8,740
$
23,740
Estimated variable manufacturing overhead cost per MH
$
2.50
$
2.00
During the most recent month, the company started and completed
two jobs--Job C and Job M. There were no beginning inventories.
Data...
Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the...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
2,600
11,600
Estimated total fixed manufacturing overhead cost
$
36,000
$
9,360
$
45,360
Estimated variable manufacturing overhead cost per MH
$
2.50
$
5.00
During the most recent month, the company started and completed
two jobs--Job C and Job M. There were no beginning inventories.
Data...
Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the...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)
14,000
2,900
16,900
Estimated total
fixed manufacturing overhead cost
$
35,000
$
8,990
$
43,990
Estimated
variable manufacturing overhead cost per MH
$
2.00
$
6.00
During the most recent month, the company started and completed
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and Customizing. The company used the following data at the
beginning of the year to calculate predetermined overhead
rates:
Casting
Customizing
Total
Estimated total
machine-hours (MHs)
5,000
5,000
10,000
Estimated total fixed
manufacturing overhead cost
$
27,500
$
10,500
$
38,000
Estimated variable
manufacturing overhead cost per MH
$
1.70
$
2.60
During the most recent month, the company started and completed
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Data...
Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the...Hultquist Corporation has two manufacturing departments--Forming
and Customizing. The company used the following data at the
beginning of the period to calculate predetermined overhead
rates:
Forming
Customizing
Total
Estimated total machine-hours (MHs)
9,000
1,000
10,000
Estimated total fixed manufacturing overhead cost
$
18,900
$
2,900
$
21,800
Estimated variable manufacturing overhead cost per MH
$
1.50
$
3.00
During the period, the company started and completed two
jobs--Job C and Job L. Data concerning those two jobs follow:
Job C...
Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the...Hultquist Corporation has two manufacturing departments--Forming
and Customizing. The company used the following data at the
beginning of the period to calculate predetermined overhead
rates:
Forming
Customizing
Total
Estimated total machine-hours (MHs)
9,000
1,000
10,000
Estimated total fixed manufacturing overhead cost
$
18,900
$
2,900
$
21,800
Estimated variable manufacturing overhead cost per MH
$
1.50
$
3.00
During the period, the company started and completed two
jobs--Job C and Job L. Data concerning those two jobs follow:
Job C...
Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the...Hultquist Corporation has two manufacturing departments--Forming
and Customizing. The company used the following data at the
beginning of the period to calculate predetermined overhead
rates:
Forming
Customizing
Total
Estimated total machine-hours (MHs)
9,000
1,000
10,000
Estimated total fixed manufacturing overhead cost
$
18,900
$
2,900
$
21,800
Estimated variable manufacturing overhead cost per MH
$
1.50
$
3.00
During the period, the company started and completed two
jobs--Job C and Job L. Data concerning those two jobs follow:
Job C...
Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the...Hultquist Corporation has two manufacturing departments--Forming
and Customizing. The company used the following data at the
beginning of the period to calculate predetermined overhead
rates:
Forming
Customizing
Total
Estimated total
machine-hours (MHs)
5,000
5,000
10,000
Estimated total
fixed manufacturing overhead cost
$
10,500
$
15,000
$
25,500
Estimated
variable manufacturing overhead cost per MH
$
2.00
$
4.00
During the period, the company started and completed two
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Estimated total machine-hours (MHs)
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Estimated total fixed manufacturing overhead cost
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