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Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours....

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?

Solutions

Expert Solution

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

ekkarill92 answered 2 years ago
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