In: Accounting
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 | $ | 656,000 |
Variable manufacturing overhead cost per machine-hour | $ | 5.00 |
Direct materials | $ | 310 |
Direct labor cost | $ | 300 |
Machine-hours used | 35 | |
QUESTION: 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?
1) | Predetermined overhead rate | ||||||||
Formula: | |||||||||
Estimated manufacturing overhead/estimated machine hours | |||||||||
Variable manufacturing overhead cost per machine hour | 5.00 | ||||||||
Fixed manufacturing overhead cost per mh | (656000/151000) | 4.34 | |||||||
predetermined overhead rate | 9.34 | per MH | |||||||
2) | Total manufacturing cost | ||||||||
$ | |||||||||
Direct materials requistioned | 310 | ||||||||
Direct labor cost | 300 | ||||||||
Overhead applied | (9.34*35MHrs) | 326.90 | |||||||
Total manufacturing cost | 937 | ||||||||
selling price = 937*130% | |||||||||
1218.1 | answer | ||||||||
to get selling price per unit divide 1218 total selling price by units produced | |||||||||