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 1 year ago

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