Carcana Corporation has two manufacturing departments--Machining and Finishing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:??MachiningFinishingTotal?Estimated total machine-hours (MHs)1,0004,0005,000?Estimated total fixed manufacturing overhead cost$4,200$8,800$13,000?Estimated variable manufacturing overhead cost per MH$1.90$2.90?During the period, the company started and completed two jobs--Job E and Job G. Data concerning those two jobs follow:??Job EJob G?Direct materials$11,800$8,000?Direct labor cost$19,200$6,700?Machining machine-hours700300?Finishing machine-hours1,6002,400Required:a. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation
base in both departments. What is the departmental predetermined overhead rate in the Machining department?b. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Finishing department?c. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job E?d. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job G?e. 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 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job E.f. 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 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job G.g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. If both jobs were sold during the month, what was the company's cost of goods sold for the month?
What will be an ideal response?
a. Machining Department predetermined overhead rate:
| ? | Estimated fixed manufacturing overhead | $4,200 | ? |
| ? | Estimated variable manufacturing overhead ($1.90 per MH × 1,000 MHs) | 1,900 | ? |
| ? | Estimated total manufacturing overhead cost (a) | $6,100 | ? |
| ? | Estimated total machine-hours (b) | 1,000 | MHs |
| ? | Departmental predetermined overhead rate (a) ÷ (b) | $6.10 | per MH |
| b. | Finishing Department predetermined overhead rate: |
| ? | Estimated fixed manufacturing overhead | $8,800 | ? |
| ? | Estimated variable manufacturing overhead ($2.90 per MH × 4,000 MHs) | 11,600 | ? |
| ? | Estimated total manufacturing overhead cost (a) | $20,400 | ? |
| ? | Estimated total machine-hours (b) | 4,000 | MHs |
| ? | Departmental predetermined overhead rate (a) ÷ (b) | $5.10 | per MH |
c. Manufacturing overhead applied to Job E:
| ? | Machining ($6.10 per MH × 700 MHs) | $4,270 |
| ? | Finishing ($5.10 per MH × 1,600 MHs) | 8,160 |
| ? | Total manufacturing overhead applied | $12,430 |
d. Manufacturing overhead applied to Job G:
| ? | Machining ($6.10 per MH × 300 MHs) | $1,830 |
| ? | Finishing ($5.10 per MH × 2,400 MHs) | 12,240 |
| ? | Total manufacturing overhead applied | $14,070 |
e. The selling price for Job E would be calculated as follows:
| ? | Direct materials | $11,800 |
| ? | Direct labor cost | 19,200 |
| ? | Manufacturing overhead applied | 12,430 |
| ? | Total manufacturing cost | $43,430 |
| ? | Markup (80%) | 34,744 |
| ? | Selling price | $78,174 |
f. The selling price for Job G would be calculated as follows:
| ? | Direct materials | $8,000 |
| ? | Direct labor cost | 6,700 |
| ? | Manufacturing overhead applied | 14,070 |
| ? | Total manufacturing cost | $28,770 |
| ? | Markup (80%) | 23,016 |
| ? | Selling price | $51,786 |
g.
| ? | Total manufacturing cost Job E | $43,430 |
| ? | Total manufacturing cost Job G | 28,770 |
| ? | Cost of goods sold | $72,200 |
You might also like to view...
Which of the following securities pay dividends?
A) corporate bonds B) common stocks C) debt securities D) Treasury bills
What is netiquette?
What will be an ideal response?
Which of the following statements about approach techniques and presentation methods is true?
A. The benefit technique is used only with the formula sales method. B. The statement approach technique is effective with any sales presentation method. C. The need-satisfaction sales presentation method should always use the questions approach technique. D. The showmanship technique does not always include a demonstration. E. The approach technique should be chosen before the sales presentation method.
Which of the following is not part of a culture of entrepreneurship?
A. A select staff are assigned to be attuned to new opportunities to create business. B. The search for venture opportunities permeates every part of the organization. C. Employees at every level are attuned to opportunities to help create new businesses. D. Every value chain activity is viewed as a source of entrepreneurial value creation.