Question

# Sanderlin Corporation has two manufacturing departments--Machining and Finishing. The company used the following data at the...

Sanderlin Corporation has two manufacturing departments--Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

 Machining Finishing Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost \$ 26,500 \$ 13,500 \$ 40,000 Estimated variable manufacturing overhead cost per MH \$ 2.00 \$ 3.00

During the most recent month, the company started and completed two jobs--Job C and Job L. There were no beginning inventories. Data concerning those two jobs follow:

 Job C Job L Direct materials \$ 12,500 \$ 8,200 Direct labor cost \$ 20,200 \$ 6,400 Machining machine-hours 3,400 1,600 Finishing machine-hours 2,000 3,000

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. The calculated selling price for Job C is closest to: (Round your intermediate calculations to 2 decimal places.)

 Computation of predetermined overhead rate Fixed Overhead Cost(\$26,500+\$13,500) \$40,000 Variable overhead cost[(5,000*\$2)+(5000*\$3)] \$25,000 Total overhead cost(a) \$65,000 Total Machine hours(b) 10000 predetermined overhead rate(a/b) \$6.50 Computation of Total manufacturing cost Job C Direct materials cost \$12,500 Direct labor cost \$20,200 Overhead cost(5,400*\$6.50) \$35,100 Total manufacturing cost(a) \$67,800 Selling Price(120% of a) \$81,360