Question
Chapter 2: Applying Excel Data Markup on job cost 75% Department Milling Assembly Machine-hours 60,000 3,000 Direct labor-hours 8,000 80,000 Total fixed manufacturing overhead cost
Chapter 2: Applying Excel | ||||
Data | ||||
Markup on job cost | 75% | |||
Department | ||||
Milling | Assembly | |||
Machine-hours | 60,000 | 3,000 | ||
Direct labor-hours | 8,000 | 80,000 | ||
Total fixed manufacturing overhead cost | $300,000 | $500,000 | ||
Variable manufacturing overhead per machine-hour | $2.00 | |||
Variable manufacturing overhead per direct labor-hour | $3.75 | |||
Cost summary for Job 407 | Department | |||
Milling | Assembly | |||
Machine-hours | 90 | 4 | ||
Direct labor-hours | 5 | 20 | ||
Direct materials | $800 | $370 | ||
Direct labor cost | $70 | $280 | ||
Enter a formula into each of the cells marked with a ? below | ||||
Step 1: Calculate the estimated total manufacturing overhead cost for each department | ||||
Milling | Assembly | |||
Total fixed manufacturing overhead cost | $300,000 | $500,000 | ||
Variable manufacturing overhead per machine-hour or direct labor-hour | $2.00 | $3.75 | ||
Total machine-hours or direct labor-hours | 60,000 | 80,000 | ||
Total variable manufacturing overhead | $120,000 | $300,000 | ||
Total manufacturing overhead | $420,000 | $800,000 | ||
Step 2: Calculate the predetermined overhead rate in each department | ||||
Milling | Assembly | |||
Total manufacturing overhead | $420,000 | $800,000 | ||
Total machine-hours or direct labor-hours | 60,000 | 80,000 | ||
Predetermined overhead rate per machine-hour or direct labor-hour | $7.00 | $10.00 | ||
Step 3: Calculate the amount of overhead applied from both departments to Job 407 | ||||
Milling | Assembly | |||
Predetermined overhead rate per machine-hour or direct labor-hour | $7.00 | $10.00 | ||
Machine-hours or direct labor-hours for the job | 90 | 20 | ||
Manufacturing overhead applied | $630.00 | $200.00 | ||
Step 4: Calculate the total job cost for Job 407 | ||||
Milling | Assembly | Total | ||
Direct materials | $800.00 | $370.00 | $1,170.00 | |
Direct labor cost | $70.00 | $280.00 | $350.00 | |
Manufacturing overhead applied | $630.00 | $200.00 | $830.00 | |
Total cost of Job 407 | $2,350.00 | |||
Step 5: Calculate the selling price for Job 407 | ||||
Total cost of Job 407 | 2,350.00 | |||
Markup | 1,762.50 | |||
Selling price of Job 407 | 4,112.50 | |||
Chapter 2: Applying Excel: Exercise (Part 2 of 2) 2. Change the total fixed manufacturing overhead cost for the Milling Department in Data area back to $390,000, keeping all of the other data the same as in the original example. Consider a new job, Job 408, with the following characteristics:
Milling Assembly Machine hours- 90 2 direct labor hours 6 40 direct material cost 640 460 direct labor cost 108 640
In your worksheet, enter this new data in the cells for Job 407. What is the new selling price for Job 408? (Round your final answer to 2 decimal places.)
3. Without changing the data for the job from requirement 2 above, what is 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? (Round your final answer to 2 decimal places.)
4. Restore the total number of machine-hours in the Assembly Department to 3,000 machine-hours. And keep the job data the same as it was in Requirement 2. What is 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 40,000 direct labor-hours? (Round your final answer to 2 decimal places.)
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