Problem - Kluth 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:
|
|
Molding
|
Customizing
|
Total
|
|
Estimated total machine-hours
|
9,000
|
3,600
|
12,600
|
|
Estimated total fixed manufacturing overhead cost
|
$36,000
|
$13,320
|
$49,320
|
|
Estimated variable manufacturing overhead cost per MH
|
$2.50
|
$3.00
|
|
During the most recent month, the company started and completed two jobs-Job C and Job M. There were no beginning inventories Data concerning those two jobs follow:
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Job C
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Job M
|
|
Direct materials
|
$16,700
|
$9,900
|
|
Direct labor cost
|
$23,400
|
$10,300
|
|
Molding machine-hours
|
2,700
|
1,300
|
|
Customizing machine - hours
|
400
|
600
|
Required: 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 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M.