Question

Harnett Corporation has two manufacturing departments--Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates:

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Harnett Corporation has two manufacturing departments--Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates Molding Assembly Total Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MEH 6,000 $ 21,600 $2.50 10,000 $ 24,400 46,000 4,000 $5.00 During the period, the company started and completed two jobs-Job E and Job M. Data concerning those two jobs follow: Direct materials Direct labor cost Molding machine-hours Assembly machine-hours Job E Job M $13,700 $7,700 $20,800 $7,600 2,500 3,500 2,500 1,500 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.) b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job E. (Do not round intermediate calculations.) c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job E. (Do not round intermediate calculations.) d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. (Do not round intermediate calculations.) e. 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 Molding department? (Round your answer to 2 decimal places.) f. 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 Assembly department? (Round your answer to

Answer 1

a
	Total	Molding	Assembly
Fixed manufacturing overhead cost	46000	21600	24400
Variable manufacturing overhead cost	35000	15000	20000
Total overhead cost	81000	36600	44400
Divide by Total machine hours	10000
Predetermined overhead rate	8.10	per MH
b
Machine hours Job E	5000
X Predetermined overhead rate	8.10
Manufacturing overhead applied	40500
c
Direct materials	13700
Direct labor	20800
Manufacturing overhead applied	40500
Manufacturing cost	75000
d
Manufacturing cost	75000
Add: Markup	15000
Selling price	90000
e
Molding department overhead	36600
Divide by Total machine hours	6000
Molding Predetermined overhead rate	6.10	per MH
f
Assembly department overhead	44400
Divide by Total machine hours	4000
Assembly Predetermined overhead rate	11.10	per MH
g
Molding department overhead applied	15250	=2500*6.10
Assembly department overhead applied	27750	=2500*11.10
Manufacturing overhead applied Job E	43000
h
Direct materials	13700
Direct labor	20800
Manufacturing overhead applied	43000
Manufacturing cost	77500
Add: Markup	15500
Selling price for Job E	93000