A company uses machine hours (MHs) to allocate their manufactuing overhead cost with capacity-based method. At the end of year, the company closes the under/over-applied manufacuturing overhead entirely to cost of goods sold. The company finds that it needs to debit cost of goods sold by $74,800 for this adjustment. Actual machine hours Estimated machine hours for planned production Estimated machine hours at capacity Estimated manufacturing overhead at capacity Actual manufacturing overhead 14,000 MHs 15000 MHS 7 MHS $72,078 $419,200 Q. What is the amount of estimated machine hours (MHs) at capacity? ANS MHS A company produces and sells two products. Selected data for the most recent month are below: Sales Variable manufacturing costs Variable non-manufacturing costs Fixed manufacturing overhead Fixed selling and administrative costs Product 1 $17,500 6,000 5,000 Product 2 $22,500 9,000 4,000 Total $40,000 15,000 9,000 5,600 2,400 Q. How much sales revenue the company should earn to achieve the target profit of $13,600 (assuming constant sales mix)? ANS. $ A company plans to sell 13,300 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month: Cost Cost Formula Cost of goods sold $60 per unit sold Advertising expense $150,000 per month Depreciation expense $70,000 per month Shipping expense $100,000 per month + $10 per unit sold Administrative salaries $50,000 per month Sales commissions 58 of sales Insurance expense $15,000 per month What is the estimated total contribution margin for next month? Multiple Choice $458,850 $358,850