CHAPTER 2 LEARNING CASE Garrity Company uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct Labor Hours required to support estimated production Machine Hours required to support estimated production Fixed Manufacturing Overhead Cost Variable Manufacturing Overhead Cost per Direct Labor Hour Variable Manufacturing Overhead Cost per Machine Hour 120,000 55,000 $635,000 $1.75 $3.50 During the year, Job B was started and completed. The following information is available with respect to this job: Direct Materials Cost Direct Labor Cost Direct Labor Hours Machine Hours $163 $210 14 5 1) Assume Garrity Company has historically used a plantwide predetermined MOH rate based on Direct Labor Hours. Answer the following: Compute the plantwide predetermined MOH rate. Compute the total manufacturing cost of Job B. If Garrity uses a markup percentage of 190% of its total manufacturing cost, what should the selling price be marked at per unit for Job B? 2) Assume Garrity Company's controller believes machine hours is a better base for determining the predetermined MOH rate. Answer the following: Compute the plantwide predetermined MOH rate based on machine hours. Compute the total manufacturing cost of Job B. If Garrity uses a markup percentage of 190% of its total manufacturing cost, what should the selling price be marked at per unit for Job B?