Koelsch Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: During the most recent month, the company started and completed two jobs--Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow:
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job K is closest to: (Round your intermediate calculations to 2 decimal places.)

Question

Koelsch Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:  During the most recent month, the company started and completed two jobs--Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow:
 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job K is closest to: (Round your intermediate calculations to 2 decimal places.)

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Molding
 11eacbfc_c6f8_7521_8ffe_f110833976dc_TB7552_00 Customizing
 11eacbfc_c6f8_9c32_8ffe_e92d3fbf9b5f_TB7552_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($6,000 + $52,200 = $58,200) to calculate the plantwide predetermined overhead rate as follow:
 11eacbfc_c6f8_9c33_8ffe_431a7fb54bbf_TB7552_00 The overhead applied to Job K is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job
= $5.82 per MH × (300 MHs + 5,400 MHs)
= $5.82 per MH × (5,700 MHs)
= $33,174
Job K's manufacturing cost:
 11eacbfc_c6f8_9c34_8ffe_2fb3fa6aded4_TB7552_00 The selling price for Job K:
 11eacbfc_c6f8_c345_8ffe_019feadf04c9_TB7552_00

Koelsch Corporation Has Two Manufacturing Departments--Molding and Customizing