Question

Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:

	Forming		Customizing		Total
Estimated total machine-hours (MHs)		6,000		4,000		10,000
Estimated total fixed manufacturing overhead cost	$	24,000	$	10,400	$	34,400
Estimated variable manufacturing overhead cost per MH	$	1.00	$	2.00

During the period, the company started and completed two jobs--Job C and Job L. Data concerning those two jobs follow:

	Job C		Job L
Direct materials	$	16,400	$	9,700
Direct labor cost	$	23,100	$	10,100
Forming machine-hours		2,500		3,500
Customizing machine-hours		2,500		1,500

Required:

e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Forming department? (Round your answer to 2 decimal places.)

f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Customizing department? (Round your answer to 2 decimal places.)

g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job L? (Do not round intermediate calculations.)

h. 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 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job L. (Do not round intermediate calculations.)

Answer 1