QUESTION 3

(15 MARKS)

Taring Corporation uses a job order costing system. At the beginning of the year, the company made the following estimates

Direct labor-hours required to support estimated productions

Machine-hours required to support estimate production

Fixed manufacturing overhead cost

Variable manufacturing overhead cost per direct labor hour

Variable manufacturing overhead cost per machine hour

RM

140.000

70.000

784 000

2.00

4.00

During the year, Job 444 was started and completed. The following information is available with respect to this job.

Direct materials

Direct labor costs

Direct labor hours

RM175

RM225

15

Machine hours

Required:

A. Assume that Taring has historically used a plantwide predetermined overhead rate with direct labor as allocation base. Under this approach

a Compute the plantwide predetermined overhead rate.

( marks)

b)

Compute the total manufacturing cost for Job 444.

(2 marks)

c)

If Taring uses a markup percentage of 200% of its manufacturing cost, determine the selling price it would establish for Job 444

(2 marks)

B. Assume that Taring's controller believes that machine hour is a better allocation base than direct-labor hours. Under this approach:

a)

Compute the plantwide predetermined overhead rate.

b)

Compute the total manufacturing cost for Job 444.

c)

If Taring uses a markup percentage of 200% of its manufacturing cost, determine the selling price it would establish for Job 444

END OF QUESTION PAPER

(3 marks)

(3 marks)

(2 marks)

Taring Corporation uses a job order costing syatem. At the betinning of the year, the company made the following estimates Daring the year, Job 444 was Harted and cempleted. The following information is avaibole with repect to this iob Required: A. Assume that Taring has historically used a plantwide predetermined ovethead rate with direct labot as allocation base. Under this approach: a) Compute the plastwide predetermined overhesd rate. (3matki) b) Compate the total masufacturing cost for Job 444 (2 marki) c) If Taring uses a markup percentage of 200% of its manuficturing pot, deteraise the selling price it wovid establisi for 30b444. B. Assume that Taring's controller belieses that machine hoor is a better allocatica base that direct labor houn Under thas approach: a) Compute the plantwide predetermined ovrthead rate b) Compute De tatal mantafaring cost for Job 444 sellisg prise it wasld ealibish for fov 444