Sanderlin Corporation has two manufacturing departments--Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: MachiningFinishingTotalEstimated total machine-hours (MHs) 5,000 5,000 10,000Estimated total fixed manufacturing overhead cost$26,500$13,500$40,000Estimated variable manufacturing overhead cost per MH$2.00$3.00 During the most recent month, the company started and completed two jobs--Job C and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job CJob LDirect materials$12,500$8,200Direct labor cost$20,200$6,400Machining machine-hours 3,400 1,600Finishing machine-hours 2,000 3,000Assume 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 20% on manufacturing cost to establish selling prices. The calculated selling price for Job C is closest to:
A. $13,784
B. $82,704
C. $87,666
D. $68,920
Answer: B
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DelauderEnterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below:Activity Cost PoolActivity MeasureActivity RateSupporting assemblyDirect labor-hours (DLHs)$3.45per DLHProcessing batchesNumber of batches$193.30per batchProcessing ordersNumber of orders$83.05per orderServing customersNumber of customers$1,608.00per customerThe cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: Number of units purchased 1,500unitsNumber
of batches 5batchesNumber of orders 2ordersDirect labor-hour requirement 0.25DLHs per unitSelling price$18.55per unitDirect materials cost$8.35per unitDirect labor cost$3.95per unitAccording to the ABC system, the total cost of the activity "Supporting assembly" for this customer this past year was closest to: A. $1,293.75 B. $5,175.00 C. $0.86 D. $375.00