Question

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.)

Answer 1

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