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		152,000
Fixed manufacturing overhead cost	$	652,000
Variable manufacturing overhead cost per machine-hour	$	4.30

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	$	310
Direct labor cost	$	210
Machine-hours used		37

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?

Answer 1

Requirement 1

Plant-wide overhead rate

$               8.59

.Requirement 2

Total cost assigned = $ 837.83 or 838 depending on round off.

Requirement 3

Unit product cost=$13.96

.

Requirement 4

Selling price per unit = 29.32 per unit

Working

Schedule of Total Manufacturing Cost
Direct Material Cost	$          310.00
Direct labor Cost	$          210.00
Overhead applied	$          317.83
Total Manufacturing Cost	$          837.83
No of units in job 400	60
Unit product cost	$            13.96
Markup	$            15.36
Selling price per unit	$            29.32

.

(A)	Fixed manufacturing Overhead Cost	$ 652,000.00
(B)	Total Machine Hours	152000
C=(A/B)	Predetermined Overheade Rate for fixed overhead	$               4.29
D	Variable manufacturing overhead cost per machine-hour	$               4.30
E=D+C	Plantwide overhead rate	$               8.59