Tancredi Corporation has two manufacturing departments--Machining 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 E and Job J. 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. If both jobs are sold during the month, the company's cost of goods sold for the month would be closest to: (Round your intermediate calculations to 2 decimal places.)

Question

Tancredi Corporation has two manufacturing departments--Machining 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 E and Job J. 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. If both jobs are sold during the month, the company's cost of goods sold for the month would be 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.
Machining
 11eacbfc_c6f9_d4bb_8ffe_b54d167f063b_TB7552_00 Customizing
 11eacbfc_c6f9_d4bc_8ffe_5726f1726148_TB7552_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($31,000 + $26,500 = $57,500) to calculate the plantwide predetermined overhead rate as follow:
 11eacbfc_c6f9_d4bd_8ffe_f71d26de842b_TB7552_00 The overhead applied to Job E is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job
= $5.75 per MH × (3,400 MHs + 2,000 MHs)
= $5.75 per MH × (5,400 MHs)
= $31,050
Job E's manufacturing cost:
 11eacbfc_c6fa_22de_8ffe_1ddbd4dc32ed_TB7552_00 The overhead applied to Job J is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job
= $5.75 per MH × (1,600 MHs + 3,000 MHs)
= $5.75 per MH × (4,600 MHs)
= $26,450
Job J's manufacturing cost:
 11eacbfc_c6fa_22df_8ffe_ddbfa80cf9a9_TB7552_00 11eacbfc_c6fa_22e0_8ffe_11462d570392_TB7552_00

Tancredi Corporation Has Two Manufacturing Departments--Machining and Customizing