The info following the questions are from the original example. Change the total fixed manufacturing overhead cost
Question:
The info following the questions are from the original example.
Change the total fixed manufacturing overhead cost for the Milling Department in the area back to $390,000, keeping all of the other data the same as in the original example. Consider a new job, Job 408, with the following characteristics:
A | B | C | |
1 | Chapter 2: Applying Excel | ||
2 | |||
3 | Cost summary for Job 408 | Department | |
4 | Milling | Assembly | |
5 | Machine-hours | 80 | 4 |
6 | Direct labor-hours | 9 | 20 |
7 | Direct materials cost | $760 | $330 |
8 | Direct labor cost | $171 | $400 |
9 |
In your worksheet, enter this new data in the cells for Job 407.
2. What is the new selling price for Job 408? (Round your final answer to 2 decimal places.) ___________
3. Without changing the data for the job from requirement 2 above, what is the selling price for Job 408 if the total number of machine-hours in the Assembly Department increases from 3,000 machine-hours to 4,000 machine-hours? (Round your final answer to 2 decimal places.) ___________
4. Restore the total number of machine-hours in the Assembly Department to 3,000 machine-hours. And keep the job data the same as it was in Requirement 2. What is 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 40,000 direct labor-hours? (Round your final answer to 2 decimal places.)_______
Data | |||
Markup on job cost | 75% | ||
Department | |||
Milling | Assembly | ||
Machine-hours | 60,000 | 3,000 | |
Direct labor-hours | 8,000 | 80,000 | |
Total fixed manufacturing overhead cost | $390,000 | $500,000 | |
Variable manufacturing overhead per machine-hour | $2.00 | ||
Variable manufacturing overhead per direct labor-hour | $3.75 | ||
Cost summary for Job 407 | Department | ||
Milling | Assembly | ||
Machine-hours | 90 | 4 | |
Direct labor-hours | 5 | 20 | |
Direct materials | $800 | $370 | |
Direct labor cost | $70 | $280 | |
Enter a formula into each of the cells marked with a ? below | |||
Step 1: Calculate the estimated total manufacturing overhead cost for each department | |||
Milling | Assembly | ||
Total fixed manufacturing overhead cost | $390,000 | $500,000 | |
Variable manufacturing overhead per machine-hour or direct labor-hour | $2.00 | $3.75 | |
Total machine-hours or direct labor-hours | 60,000 | 80,000 | |
Total variable manufacturing overhead | $120,000 | $300,000 | |
Total manufacturing overhead | $420,000 | $800,000 | |
Step 2: Calculate the predetermined overhead rate in each department | |||
Milling | Assembly | ||
Total manufacturing overhead | $420,000 | $800,000 | |
Total machine-hours or direct labor-hours | 60,000 | 80,000 | |
Predetermined overhead rate per machine-hour or direct labor-hour | $7.00 | $10.00 | |
Step 3: Calculate the amount of overhead applied from both departments to Job 407 | |||
Milling | Assembly | ||
Predetermined overhead rate per machine-hour or direct labor-hour | $7.00 | $10.00 | |
Machine-hours or direct labor-hours for the job | 90 | 20 | |
Manufacturing overhead applied | $630.00 | $200.00 | |
Step 4: Calculate the total job cost for Job 407 | |||
Milling | Assembly | Total | |
Direct materials | $800.00 | $370.00 | $1,170.00 |
Direct labor cost | $70.00 | $280.00 | $350.00 |
Manufacturing overhead applied | $630.00 | $200.00 | $830.00 |
Total cost of Job 407 | $2,350.00 | ||
Step 5: Calculate the selling price for Job 407 | |||
Total cost of Job 407 | 2,350.00 | ||
Markup | 75.00 | ||
Selling price of Job 407 | 4,112.50 | ||
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Olds