Question

# Maria Company uses a job order costing system with a plantwide overhead rate on machine-hours. At...

Maria Company uses a job order costing system with a plantwide overhead rate on machine-hours. At the beginning of the year, the company made the following estimates:

 Machine Hours estimated to support estimated production 210,000 Fixed manufacturing overhead cost \$3,360,000.00 Variable manufacturing overhead cost per machine-hour \$              2.00

During the year, Job P90 was started, completed, and sold to the customer. The following information was available with respect to this job.

 Direct materials \$1,564.00 Direct labor cost \$1,122.00 Machine-hours used 81

Required:

a. Compute the plantwide predetermined overhead rate.

b. Compute the total manufacturing overhead assigned to Job P90.

c. Compute the unit product cost of Job P90.

d. If the company uses a markup of 50%, compute the selling price for Job P90.

a. Plantwide predetermined overhead rate = Fixed manufacturing overhead cost / Machine Hours estimated

= \$3,360,000 / 210,000

= \$16 per machine hour

b. Total manufacturing overhead assigned to Job P90 = (Variable overhead rate per hour + Fixed overhead rate per hour)*Machine-hours used

= (2+16)*81

= \$1,459

c. Unit product cost of Job P90 = Direct material + Direct labor + Total manufacturing overhead cost

=1564+1122+1459

= \$4,145

d. Selling price for Job P90 = Unit product cost of Job P90 + Unit product cost of Job P90 *50%

= \$4,145 + \$4,145*50%

= \$6217.50

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