EXERCISE $2-12$ Computing Predetermined Overhead Rates and Job Costs LO$2-1,$ LO$2-2,$ LO$2-3$

Moody Corporation uses a job$-$order costing system with a plantwide predetermined overhead rate based on machine$-$hours. At the beginning of the year, the company made the following estimates:

Machine$-$hours required to support estimated production

$100,000$

Fixed manufacturing overhead cost

$$650,000$

Variable manufacturing overhead cost per machine$-$hour

$$3\mathrm{.}00$

Required:

$1.$ Compute the plantwide predetermined overhead rate.

$2.$ During the year, Job $400$ was started and completed. The following information was available with respect to this job:

Direct materials

$$450$

Direct labor cost $$210$

Machine$-$hours used $40$

Compute the total manufacturing cost assigned to Job $400.$

$3.$ If Job $400$ includes $52$ units, what is the unit product cost for this job?

$4.$ If Moody uses a markup percentage of $120\%$ of its total manufacturing cost, then what selling price per unit would it have established for Job $400?$

$5.$ If Moody hired you as a consultant to critique its pricing methodology, what would you say?