Question
Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:
Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:
Forming | Customizing | Total | ||||
Estimated total machine-hours (MHs) | 4,000 | 6,000 | 10,000 | |||
Estimated total fixed manufacturing overhead cost | $ | 8,000 | $ | 15,000 | $ | 23,000 |
Estimated variable manufacturing overhead cost per MH | $ | 3.00 | $ | 6.00 | ||
During the period, the company started and completed two jobs--Job C and Job L. Data concerning those two jobs follow:
Job C | Job L | |||||
Direct materials | $ | 16,000 | $ | 9,400 | ||
Direct labor cost | $ | 22,700 | $ | 9,700 | ||
Forming machine-hours | 1,250 | 2,750 | ||||
Customizing machine-hours | 1,250 | 4,750 | ||||
Required:
a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.)
b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job L. (Do not round intermediate calculations.)
c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job L. (Do not round intermediate calculations.)
d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job L. (Do not round intermediate calculations.)
e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Forming department? (Round your answer to 2 decimal places.)
f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Customizing department? (Round your answer to 2 decimal places.)
g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job L? (Do not round intermediate calculations.)
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