Lotz Corporation has two manufacturing departments--Casting and Finishing.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 departmental predetermined overhead rates with machine-hours as the allocation base in both production departments.Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices.The calculated selling price for Job F is closest to:
A) $30,220
B) $90,660
C) $60,440
D) $96,100

Question

Lotz Corporation has two manufacturing departments--Casting and Finishing.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 departmental predetermined overhead rates with machine-hours as the allocation base in both production departments.Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices.The calculated selling price for Job F is closest to:
A) $30,220 
B) $90,660 
C) $60,440 
D) $96,100

Quizplus · Accepted Answer

Casting Department predetermined overhead rate:
 11ea7761_192a_f4ec_81a5_9b95319c14d1_TB2580_00 Finishing Department predetermined overhead rate:
 11ea7761_192a_f4ed_81a5_0d05fb235b00_TB2580_00 Manufacturing overhead applied to Job F:
 11ea7761_192b_1bfe_81a5_01ac3dcda8cd_TB2580_00 The selling price for Job F would be calculated as follows:
 11ea7761_192b_430f_81a5_4b186271bed7_TB2580_00

Lotz Corporation Has Two Manufacturing Departments--Casting and Finishing