Question
Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
| Molding | Customizing | Total | ||||
| Estimated total machine-hours (MHs) | 12,000 | 2,800 | 14,800 | |||
| Estimated total fixed manufacturing overhead cost | $ | 26,400 | $ | 9,240 | $ | 35,640 |
| Estimated variable manufacturing overhead cost per MH | $ | 1.50 | $ | 2.00 | ||
During the most recent month, the company started and completed two jobs--Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow:
| Job C | Job M | |||||
| Direct materials | $ | 15,800 | $ | 9,300 | ||
| Direct labor cost | $ | 22,600 | $ | 9,500 | ||
| Molding machine-hours | 2,500 | 9,500 | ||||
| Customizing machine-hours | 1,800 | 1,000 | ||||
Required:
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 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M.
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Intermediate Accounting 2014 FASB Update
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
15th edition
978-1118938782, 111893878X, 978-1118985311, 1118985311, 978-1118562185, 1118562186, 978-1118147290
