Question

Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Finishing Total Estimated total machine-hours (MHs) 4,000 1,000 5,000 Estimated total fixed manufacturing overhead cost $ 19,600 $ 2,400 $ 22,000 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.10 During the most recent month, the company started and completed two jobs--Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow: Job A Job M Direct materials $ 13,600 $ 7,500 Direct labor cost $ 20,700 $ 7,400 Molding machine-hours 2,700 1,300 Finishing machine-hours 400 600 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job A is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

The selling price for Job A is $75,978.00

Step-by-step explanation:

Molding Finishing Totals

Machine hours 4000 1000 5000

Fixed mnf. overheads 19600 2400 22000

Variable manufacturing

Overheads per machine hours 1.1 2.1

JOB A JOB B

Direct materials 13,600 7500

Direct labour costs 20,700 7400

Molding machines 2700*1.1= 2,970

Finishing 400*2.1= 840

Fixed mnf: molding 19600*4000/5000= 15,680

Fixed mnf: finishing 2400*1000/5000= 480

Total cost (sum of all the above) $54,270

Mark up = 40%

Mark up=gross profit (GP)*100/cost

40%= GP*100/54270

40*54270/100= GP

GP= 21,708

Sales= cost + GP

Sales= 21,708+54,270

Sales= $75,978.00