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:

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:

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Molding
 11ea7761_1921_a5dc_81a5_bd0c4ffdb8d8_TB2580_00 Customizing
 11ea7761_1921_cced_81a5_599c944d6493_TB2580_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:
 11ea7761_1921_f3fe_81a5_11a63c471297_TB2580_00 The overhead applied to Job K is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $5.82 per MH x (300 MHs + 5,400 MHs)
= $5.82 per MH x (5,700 MHs)
= $33,174
Job K's manufacturing cost:
 11ea7761_1921_f3ff_81a5_519c138965bc_TB2580_00 The selling price for Job K:
 11ea7761_1921_f400_81a5_5d5edd0f9fbb_TB2580_00

Koelsch Corporation Has Two Manufacturing Departments--Molding and Customizing