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15 April, 00:59

Markup on job cost 75%

Department

Milling Assembly

Machine-hours 60,000 3,000

Direct labor-hours 8,000 80,000

Total fixed manufact$ 390,000 $500,000

uring overhead cost

Variable manufacturing overhead per machine-hour $2.00

Variable manufacturing overhead per direct labor-hour $3.75

Cost summary for Job 407 Department

Milling Assembly

Machine-hours 90 4

Direct labor-hours 5 20

Direct materials $800 $370

Direct labor cost $70 $280

Enter a formula into each of the cells marked with a? below

Step 1: Calculate the estimated total manufacturing overhead cost for each department

Step 2: Calculate the predetermined overhead rate in each department

Step 3: Calculate the amount of overhead applied from both departments to Job 407

Step 4: Calculate the total job cost for Job 407

Total cost of Job 407

Step 5: Calculate the selling price for Job 407

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Answers (1)
  1. 15 April, 04:30
    0
    Instructions are below.

    Explanation:

    Giving the following information:

    Markup on job cost 75%

    Milling Assembly

    Machine-hours 60,000 3,000

    Direct labor-hours 8,000 80,000

    Total fixed manufacturing overhead cost $ 390,000 $500,000

    Variable manufacturing overhead per machine-hour $2.00

    Variable manufacturing overhead per direct labor-hour $3.75

    Job 407:

    Milling Assembly

    Machine-hours 90 4

    Direct labor-hours 5 20

    Direct materials $800 $370

    Direct labor cost $70 $280

    1) We need to calculate the total overhead costs:

    Milling = 390,000 + 2*60,000 + 3.75*8,000 = $540,000

    Assembly = 500,000 + 2*3,000 + 3.75*80,000 = $806,000

    2) Now, the predetermined overhead rate per department:

    Predetermined manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

    For Milling we will use machine hours as allocation base:

    Milling = 540,000/60,000 = $9 per machine hour

    For Assembly, we will use direct labor hours:

    Assembly = 806,000/80,000 = $10.075 per direct labor hour

    3) We need to allocate overhead to Job 407

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Milling = 9*90 = $810

    Assembly = 10.075*20 = $201.5

    Total overhead = $1,011.5

    4) Total cost = (800 + 370) + (70 + 280) + 1,011.5

    Total cost = $2,531.5

    5) Finally, the selling price:

    Selling price = 2,531.5*1.75 = $4,430.125
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Home » Business » Markup on job cost 75% Department Milling Assembly Machine-hours 60,000 3,000 Direct labor-hours 8,000 80,000 Total fixed manufact$ 390,000 $500,000 uring overhead cost Variable manufacturing overhead per machine-hour $2.
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