Chapter 2: Applying Excel Data Markup on job cost 75% Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Milling Assembly 60,000 3,000 8,000 80,000 $390,000 $500,000 $2.00 $3.75 Cost summary for Job 407 Machine-hours Direct labor-hours Direct materials Direct labor cost Department Milling Assembly 90 20 $800 $370 $280 $70 Enter a formula into each of the cells marked with a ? below Assembly Step 1: Calculate the estimated total manufacturing overhead cost for each department Milling Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour or direct labor-hour Total machine-hours or direct labor-hours Total variable manufacturing overhead Total manufacturing overhead Step 2: Calculate the predetermined overhead rate in each department Milling Assembly Total manufacturing overhead Total machine-hours or direct labor-hours Predetermined overhead rate per machine-hour or direct labor-hour Assembly Step 3: Calculate the amount of overhead applied from both departments to Job 407 Milling Predetermined overhead rate per machine-hour or direct labor-hour Machine-hours or direct labor-hours for the job Manufacturing overhead applied Step 4: Calculate the total job cost for Job 407 Milling Assembly Total Direct materials Direct labor cost Manufacturing overhead applied Total cost of Job 407 ? Step 5: Calculate the selling price for Job 407 Total cost of Job 407 Markup Selling price of Job 407 EXHIBIT 2-5 Dickson Company: An Example Using Multiple Predetermined Overhead Rates Step 1: Calculate the estimated total manufacturing overhead cost for each department. Miling Department Overhead Cost (Y): Assembly Department Overhead Cost (Y): = $390,000 + ($2.00 per MH X 60.000 MHS) = $500,000 + ($3.75 per DLH X 80,000 DLHs) = $390,000+ $120,000 = $500,000 + $300,000 = $510,000 = $800,000 Step 2: Calculate the predetermined overhead rate in each department. Milling Department Overhead Rate: Assembly Department Overhead Rate: $510,000 $800,000 60,000 machine-hours 80,000 direct labor-hours = $8.50 per machine-hour = $10.00 per direct labor-hour Step 3: Calculate the amount of overhead applied from both departments to Job 407. Milling Department Overhead Applied to Job 407 Assembly Department: Overhead Applied to Job 407 = $8.50 per MH x 90 MHS = $10.00 per DLH x 20 DLHS = $765 = $200 Step 4: Calculate the total job cost for Job 407. Direct materials .......... Direct labor .... Manufacturing overhead applied .......... Total cost of Job 407 Milling Assembly $800 $370 $ 70 $280 $765 $200 Total $1,170 350 965 $2,485 Step 5: Calculate the selling price for Job 407. Total cost of Job 407 .... Markup ($2,485 x 75%) Selling price of Job 407 ........... $2,485.00 1,863.75 $4,348.75 Required Information This Excel worksheet relates to the Dickson Company example that is summarized in Exhibit 2-5 Download the Applying Excel form and enter formulas in all cells that contain question marks. The Chapter 2 Form worksheet is to be used to create your own worksheet version of the example in the text. Enter formulas in the cells that contain question marks. For example, in cell B25 enter the formula "=B10". After entering formulas in all of the cells that contained question marks, verify that the amounts match the example in the text. Check your worksheet by changing the total fixed manufacturing overhead cost for the Milling Department in the Data area to $300,000, keeping all 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. You should proceed to the requirements below only after completing your worksheet. Save your completed Applying Excel form to your computer and then upload it here by clicking "Browse." Next, click "Save." You will use this worksheet to answer the questions in Part 2
