Question

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

Machine-hours required to support estimated production		156,000
Fixed manufacturing overhead cost	$	653,000
Variable manufacturing overhead cost per machine-hour	$	4.30

Required:

1. Compute the plantwide predetermined overhead rate.

2. During the year, Job 400 was started and completed. The following information was available with respect to this job:

Direct materials	$	340
Direct labor cost	$	290
Machine-hours used		40

Compute the total manufacturing cost assigned to Job 400.

3. If Job 400 includes 60 units, what is the unit product cost for this job?

4. If Moody uses a markup percentage of 130% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

Questions:

1. Predetermined overhead rate ______ per MH (Round answer to 2 decimal spaces)

2. Total manufacturing cost ______ (Round your intermediate calculations to 2 decimal places and your final answer to the nearest dollar amount.)

3. If Job 400 includes 60 units, what is the unit product cost for this job? (Round your intermediate calculations and final answer to the nearest whole dollar.)

unit product cost _____

4. If Moody uses a markup percentage of 130% of its total manufacturing cost, then what selling price per unit would it have established for Job 400? (Round your intermediate calculations and final answer to the nearest whole dollar.)

Selling price per unit _____

Answer 1

• Requirement 1

A	Fixed manufacturing Overhead	$653,000
B	Machine hours	156,000
C = A/B	Fixed overhead per machine hour	$4.19
D	Variable overhead per machine hour	$4.30
E = C+D	Plantwide Overhead rate	$8.49	Answer

• Working

A	Machine hours used	40
B	Plantwide Overhead rate	$8.49
C = A x B	Manufacturing Cost assigned to Job 400	$340

• Requirement 2

A	Direct material	$340
B	Direct Labor	$290
C	Manufacturing Cost assigned to Job 400	$340
D = A+B+C	Total Cost	$970 Answer

• Requirement 3

Unit product Cost = $ 970 / 60 units = $ 16.17 or $ 16 per unit

• Requirement 4

Selling price per unit = $ 16 + (16 x 130%) = 16 + 21 = $ 37 per unit