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		156,000
Fixed manufacturing overhead cost	$	651,000
Variable manufacturing overhead cost per machine-hour	$	4.60

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	$	370
Direct labor cost	$	290
Machine-hours used		31

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 110% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

-Predetermined overhead rateper MH?

If Job 400 includes 60 units, what is the unit product cost for this job?

total manufacturing costs?

If Moody uses a markup percentage of 110% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

What is selling price per unit?

Answer 1

• [1]

A	Fixed manufacturing overhead cost	$                                              651,000
B	Machine hours required	156,000	machine hours
C = A/B	Fixed overhead rate	$                                                     4.17	per machine hour
D	Variable overhead rate	$                                                     4.60	per machine hour
E = C+D	Plantwide Predetermined Overhead rate	$                                                     8.77	per machine hour

• [2]

A	Machine hours used	31
B	Plantwide Predetermined Overhead rate	$                                                     8.77
C = A x B	Total manufacturing cost assigned to Job 400	$                                                      272	Answer

• [3]

A	Direct materials	$                                                      370
B	Direct labor cost	$                                                      290
C	Total manufacturing cost assigned to Job 400	$                                                      272
D = A+B+C	Total cost for the Job	$                                                      932
E	Total units for Job 400	60
F = D/E	Units product cost for Job 400	$                                                  15.53	Answer

• [4]

A	Units product cost for Job 400	$                                                  15.53
B = A x 110%	Mark up at 110%	$                                                  17.09
C = A+B	Selling price per unit	$                                                  32.62	Answer