CHAPTER $2$

LEARNING CASE

Garrity Company uses a job$-$order costing system. At the beginning of the year, the company

made the following estimates:

Direct Labor Hours required to support estimated production

Machine Hours required to support estimated production

Fixed Manufacturing Overhead Cost

Variable Manufacturing Overhead Cost per Direct Labor Hour

Variable Manufacturing Overhead Cost per Machine Hour

$120,000$

$55,000$

$$635,000$

$$1\mathrm{.}75$

$$3\mathrm{.}50$

During the year, Job B was started and completed. The following information is available with

respect to this job:

Direct Materials Cost

Direct Labor Cost

Direct Labor Hours

Machine Hours

$$163$

$$210$

$14$

$5$

Assume Garrity Company has historically used a plantwide predetermined MOH rate

based on Direct Labor Hours. Answer the following:

Compute the plantwide predetermined MOH rate.

Compute the total manufacturing cost of Job B$.$

If Garrity uses a markup percentage of $190\%$ of its total manufacturing cost, what

is the selling price for Job B$?$