Question
Karine Corp has two production departments, Machining and Customization. The company uses a job-order costing system and computes a predetermined overhead rate in each production
Karine Corp has two production departments, Machining and Customization. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining departments predetermined overhead rate is based on machine hours and the Customization departments predetermined overhead rate is based on direct labor hours. The company has made the following estimates for the two production departments:
Machining | Customization | |
Machine hours | 16,000 | 11,000 |
Direct labor hours | 18,000 | 6,000 |
Total fixed manufacturing overhead cost | $92,800 | $28,800 |
Variable manufacturing overhead per machine hour | $1.20 | - |
Variable manufacturing overhead per labor hour | - | $5.00 |
The following data was recorded for Job 2110:
Machining | Customization | |
Machine hours | 50 | 40 |
Direct labor hours | 60 | 30 |
Direct materials | $430 | $180 |
Direct labor cost | $800 | $540 |
5. What is the predetermined overhead rate for the Machining Department?
6. What is the predetermined overhead rate for the Customization Department?
7. What was the total cost of Job 2110?
8. If the company marks up its manufacturing costs by 40%, then what is the total selling price for Job 2110 (rounded to nearest dollar)?
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