Question

Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:Forming Customizing TotalEstimated total machine-hours (MHs) 7,000 3,000 10,000Estimated total fixed manufacturing overhead cost $25,900 $7,200 $33,100Estimated variable manufacturing overhead cost per MH $2.50 $5.00 During the period, the company started and completed two jobs--Job C and Job L. Data concerning those two jobs follow:Job C Job LDirect materials $16,900 $10,300Direct labor cost $23,600 $10,600Forming machine-hours 1,250 2,000Customizing machine-hours 1,250 500Required:a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.)b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job L. (Do not round intermediate calculations.)c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job L. (Do not round intermediate calculations.)d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling price for Job L.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Estimated total machine-hours (MHs) 10,000

Estimated total fixed manufacturing overhead cost $33,100

Estimated variable manufacturing overhead cost per MH $2.50 $5.00

A)Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= (33,100/10,000) + 7.5= $10.81 per machine hour.

B) Job C

Forming machine-hours 1,250

Customizing machine-hours 1,250

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 10.81*2,500 hours= $27,025

C) Job L

Forming machine-hours 2,000

Customizing machine-hours 500

Allocated MOH= 10.81*2,500= 27,025

D) Job L:

Direct materials $10,300

Direct labor cost $10,600

Overhead= 27,025

Total cost= 10,300 + 10,600 + 27,025= $47,925

Selling price= 47,925*1.20= $57,510