This Excel worksheet relates to the Dickson Company example that is summarized in Exhibit 2–5. The workbook, and instructions on how to complete the file, can be found in Connect.

You should proceed to the requirements below only after completing your worksheet.

Required:

1. Check your worksheet by changing the total fixed manufacturing overhead cost for the Milling Department in the Data area to $300,000, keeping all of the other data the same as in the original example. If your worksheet is operating properly, the total cost of Job 407 should now be $2,350. If you do not get this answer, find the errors in your worksheet and correct them. How much is the selling price of Job 407? Did it change? Why or why not?

2. Change the total fixed manufacturing overhead cost for the Milling Department in the Data area back to $390,000, keeping all of the other data the same as in the original example. Determine the selling price for a new job, Job 408, with the following characteristics. You need not bother changing the job number from 407 to 408 in the worksheet.

3. What happens to the selling price for Job 408 if the total number of machine-hours in the Assembly Department increases from 3,000 machine-hours to 6,000 machine-hours? Does it increase, decrease, or stay the same as in part 2 above? Why?

4. Restore the total number of machine-hours in the Assembly Department to 3,000 machine hours. What happens to the selling price for Job 408 if the total number of direct labor hours in the Assembly Department decreases from 80,000 direct labor-hours to 50,000 direct labor-hours? Does it increase, decrease, or stay the same as in part 2 above? Why?

Transcribed Image Text:

A C E 1 Chapter 2: Applying Excel 2 3 Data 4 Markup on job cost 75% 5 Department Milling 60,000 8,000 $390,000 $2.00 6 Assembly 3,000 80,000 $500,000 7 8 Machine-hours 9 Direct labor-hours 10 Total fixed manufacturing overhead cost 11 Variable manufacturing overhead per machine-hour 12 Variable manufacturing overhead per direct labor-hour $3.75 13 Department Assembly 90 14 Cost summary for Job 407 15 Milling 16 Machine-hours 4 17 Direct labor-hours 20 18 Direct materials $800 $370 $280 19 Direct labor cost $70 20 21 Enter a formula into each of the cells marked with a ? below 22 23 Step 1: Calculate the estimated total manufacturing overhead cost for each department Assembly 24 Milling 25 Total fixed manufacturing overhead cost 26 Variable manufacturing overhead per machine-hour or direct labor-hour 27 Total machine-hours or direct labor-hours 28 Total variable manufacturing overhead 29 Total manufacturing overhead ? ? ? ? ? ? 30 31 Step 2: Calculate the predetermined overhead rate in each department Milling Assembly ? 32 33 Total manufacturing overhead 34 Total machine-hours or direct labor-hours 35 Predetermined overhead rate per machine-hour or direct labor-hour ? ? 36 37 Step 3: Calculate the amount of overhead applied from both departments to Job 407 Milling Assembly ? 38 39 Predetermined overhead rate per machine-hour or direct labor-hour 40 Machine-hours or direct labor-hours for the job 41 Manufacturing overhead applied ? ? 42 43 Step 4: Calculate the total job cost for Job 407 44 Milling Assembly Total 45 Direct materials 46 Direct labor cost 47 Manufacturing overhead applied 48 Total cost of Job 407 ? ? ? 49 50 Step 5: Calculate the selling price for Job 407 51 Total cost of Job 407 ? 52 Markup ? 53 Selling price of Job 407 ? 54 K1 N Chapter 2 Form Filled in Chapter 2 Form