This Excel worksheet relates to the Dickson Company example that is summarized in Exhibit 2–5. The workbook, and instructions on how to complete the file, can be found in Connect.

You should proceed to the requirements below only after completing your worksheet.
Required:
1. Check your worksheet by changing the total fixed manufacturing overhead cost for the Milling Department in the Data area to $300,000 keeping all of the other data the same as in the original example. If your worksheet is operating properly, the total cost of Job 407 should now be $2,350. If you do not get this answer, find the errors in your worksheet and correct them.
How much is the selling price of Job 407? Did it change? Why or why not?
2. Change the total fixed manufacturing overhead cost for the Milling Department in the Data area back to $390,000, keeping all of the other data the same as in the original example. Determine the selling price for a new job, Job 408, with the following characteristics. You need not bother changing the job number from 407 to 408 in the worksheet.

Department Cost summary for Job 408 Milling Assembly Machine-hours... 40 10 Direct labor-hours. 2 6 Direct materials.. $700 $360 Direct labor cost.. $50 $150 3. What happens to the selling price for Job 408 if the total number of machine-hours in the Assembly Department increases from 3,000 machine-hours to 6,000 machine-hours? Does it increase, decrease, or stay the same as in part 2 above? Why?
4. Restore the total number of machine-hours in the Assembly Department to 3,000 machine-ours. What happens to the selling price for Job 408 if the total number of direct labor-hours in the Assembly Department decreases from 80,000 direct labor-hours to 50,000 direct labor-hours?
Does it increase, decrease, or stay the same as in part 2 above? Why?

Transcribed Image Text:

Chapter 2: Applying Excel Data 4 Markup on jab cost 6 A 75% Departmest Milling Assembly 3.000 Machine-hours Direct labor-hours 20 Total fixed manufacturing overhead cost 11 Variable manufacturing overhead per machine-hour 12 Vanable manufacturing overhead per direct labor-hour 14 Cest summary for Job 407 15 15 Machine-hours 17 Direct labor-hours 18 Direct materials 19 Direct labor cost 201 60.000 8,000 $390,000 80,000 $500.000 $2.00 Department $3.75 Milling Assembly 4 10 5 20 $800 $370 $70 $280 21 Enter a formule into each of the cells marked with a ? belo 22 23 Stop 1: Calculate the estimated total manufacturing overhead cost for each department 24 25 Total fixed manufacturing overhead cost 26 Variable manufacturing overhead per machine-hour or direct laber-hour 27 Total machine-hours or direct labor-hours 28 Total variable manufacturing overhead Miling 29 Total manufacturing overhead 30 31 Step 2: Calculate the predetermined overhead rate in each department Assembly 2 ? 32 Milling Assembly Total manufacturing overhead ? 34 Total machine-hours or direct labor-hours 2 35 Predetermined everhead rate per machine-hour or direct labor-hour ? ??? 36 37 Step 3: Calculate the amount of overhead applied from both departments to Job 407 Milling Assembly 39 Predetermined everhead rate per machine-hour or direct labor-hour ??? 2 2 ? 40 Machine-hours or direct labor-hours for the job 41 Manufacturing overhead applied 42 43 Step 4: Calculate the total job cost for Job 437 44 45 Direct materials 45 Direct labor cost 47 Manufacturing overhead applied 48 Total cost of Job 407 50 Stop 5: Calculate the selling price for Job 407 5 Total cost of Job 407 52 Markup 53 Saling price of Job 407 54 Chapter 2 Form Fled in Chapter 2 Form Source: Microsoft Excel D Milling Assembly Total ? 7 7 ? 2 7 7 7 12