Question
Janicki Corporation has two manufacturing departments--Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
Janicki Corporation has two manufacturing departments--Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
Machining Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 23,400 $ 28,200 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.50
During the most recent month, the company started and completed two jobs--Job A and Job J. There were no beginning inventories. Data concerning those two jobs follow:
Job A Job J Direct materials $ 12,000 $ 7,700 Direct labor cost $ 20,700 $ 6,400 Machining machine-hours 700 300 Customizing machine-hours 3,600 5,400
Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: $55,190 $82,785 $87,752 $27,595
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