EXHIBIT 2-5 Dickson Company: An Example Using Multiple Predetermined Overhead Rates Step 1: Calculate the estimated total manufacturing overhead cost for each department, Milling Department Overhead Cost (Y): Assembly Department Overhead Cost (9) = $390,000 + ($2.00 per MH60,000 MHs) = $500,000 + ($3.75 per DLH * 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 90 MHs = $10.00 per DLH 20 DLHs = $765 = $200 Step 4: Calculate the total job cost for Job 407 Milling Assembly Total Direct materials $800 $370 $ 1,170 Direct labor $70 $280 350 Manufacturing overhead applied $765 $200 965 Total cost of Job 407 $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 2. Change the totaled manufacturing overhead cost for the Milling Department Data are back to $390,000 keeping of the other data the same as in the original example. Consider a new job, ob 40. With the following characteristics Chapter 2 Applying Erol 1 2 3 Cost summary for Job 40 5 Machine hours Director hours 7 Direct mau 0 Director con Department Aar 50 3 5 49 1201 400 100 S 760 5 In your worksheet, enter this new data in the cells for Job 402 What is the new selling price for Job 40B? (Round your final answer to 2 decimal places.) 2. Without changing the data for the job from requirement 2 abow, what is the selling price for Job 408 it the total number of machine hours in the Assembly Department increases from 3.000 machine-hours to 5.000 machine-hours? (Round your final answer to 2 decimal places.) 4 Restore the total number of machine hours in the Assembly Department to 3000 machinebours. And keep the job data the same it was in Requirement 2. What is the selling price for Job 40B if the total number of direct labor hours in the Assembly Department decreasestrom 6000 direct labor hours to 40.000 de bonheurs (Round your final answer to 2 decimal places)