Question

# Collini Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system...

Collini Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:

 Machining Customizing Machine-hours 17,000 15,000 Direct labor-hours 3,000 6,000 Total fixed manufacturing overhead cost \$ 102,000 \$ 61,200 Variable manufacturing overhead per machine-hour \$ 1.70 Variable manufacturing overhead per direct labor-hour \$ 4.10

During the current month the company started and finished Job T268. The following data were recorded for this job:

 Job T268: Machining Customizing Machine-hours 80 30 Direct labor-hours 30 50 Direct materials \$ 720 \$ 380 Direct labor cost \$ 900 \$ 1,500

If the company marks up its manufacturing costs by 40% then the selling price for Job T268 would be closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

\$6,763.40

\$7,440.00

\$4,831.00

\$1,932.40

Predetermine overhead rate of machining = (102000/17000)+1.70 = 7.7 per machine hour

Predetermine overhead rate of fabrication = (61200/6000)+4.10 = 14.30 per labour hour

Calculate selling price :

 Direct material (720+380) 1100 Direct labour (900+1500) 2400 Machining department overhead (7.7*80) 616 Fabrication department overhead (50*14.3) 715 Total manufactuirng cost 4831 Markup 40% 1932.40 Selling price 6763.40

#### Earn Coins

Coins can be redeemed for fabulous gifts.