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Please help me with the solution 8. Use the information below to answer the two questions that follow: A local company uses job-order costing and
Please help me with the solution
8. Use the information below to answer the two questions that follow: A local company uses job-order costing and manufactures its products in two departments: Cutting and Sewing. At the beginning of the most recent period, the company estimated the following: Cutting Sewing Estimated Direct labor-hours (DH) 40,000 12,000 Estimated Machine-hours (MH) 10,000 50,000 Estimated Manufacturing overhead (MOH) $260,000 $400,000 Because an increase in demand, activity and cost for the period was higher than expected. Actual data are shown below: Cutting Sewing Actual Direct-labor hours (DH) 45,000 14,000 Actual Machine-hours (MH) 15,000 60,000 Actual Manufacturing overhead (MOH) $300,000 $410,000 The company is looking to price a product it produced for a customer as Job #Z154. Actual results for this job are: Job $Z154 Cutting Sewing Materials cost $1,200 $2,600 Direct labor cost 378 $147 DLHs 18 7 MHs 3 19 a. If the company applies MOH using a plant-wide Predetermined Overhead rate (POHR) based on MHs and prices its product using a markup of 30% what price would the company charge for Job #Z154? b. The company is considering a change to apply MOH to jobs using departmental POHRs. If the company uses DLHs as the allocation base for the Cutting Department and uses MHs as the allocation base for the Sewing Department, what would be the revised price the company would change for job #Z154
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