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 $510,000 $800,000 Step 2: Calculate the predetermined overhead rate in each department Milling Assembly Total manufacturing overhead $510,000 $800,000 Total machine-hours or direct labor-hours 60,000 80,000 Predetermined overhead rate per machine-hour or direct labor-hour $8.50 $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 $8.50 $10.00 Machine-hours or direct labor-hours for the job 90 20 Manufacturing overhead applied $765.00 $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 $765.00 $200.00 $965.00 Total cost of Job 407 $1,635.00 Step 5: Calculate the selling price for Job 407 Total cost of Job 407 1,635.00 Markup 850.00 Selling price of Job 407 2,485.00
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 $510,000 $800,000 Step 2: Calculate the predetermined overhead rate in each department Milling Assembly Total manufacturing overhead $510,000 $800,000 Total machine-hours or direct labor-hours 60,000 80,000 Predetermined overhead rate per machine-hour or direct labor-hour $8.50 $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 $8.50 $10.00 Machine-hours or direct labor-hours for the job 90 20 Manufacturing overhead applied $765.00 $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 $765.00 $200.00 $965.00 Total cost of Job 407 $1,635.00 Step 5: Calculate the selling price for Job 407 Total cost of Job 407 1,635.00 Markup 850.00 Selling price of Job 407 2,485.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
| Data | |||
| Markup on |
75% | ||
| Department | |||
| Milling | Assembly | ||
| Machine-hours | 60,000 | 3,000 | |
| Direct labor-hours | 8,000 | 80,000 | |
| Total fixed |
$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 | $510,000 | $800,000 | |
| Step 2: Calculate the predetermined overhead rate in each department | |||
| Milling | Assembly | ||
| Total manufacturing overhead | $510,000 | $800,000 | |
| Total machine-hours or direct labor-hours | 60,000 | 80,000 | |
| Predetermined overhead rate per machine-hour or direct labor-hour | $8.50 | $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 | $8.50 | $10.00 | |
| Machine-hours or direct labor-hours for the job | 90 | 20 | |
| Manufacturing overhead applied | $765.00 | $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 | $765.00 | $200.00 | $965.00 |
| Total cost of Job 407 | $1,635.00 | ||
| Step 5: Calculate the selling price for Job 407 | |||
| Total cost of Job 407 | 1,635.00 | ||
| Markup | 850.00 | ||
| Selling price of Job 407 | 2,485.00 |
Transcribed Image Text:2. Change the total fixed manufacturing overhead cost for the Milling Department in Data 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
1 Chapter 2: Applying Excel
2
3
4
5
6
7
8
Cost summary for Job 408
Machine-hours
Direct labor-hours
Direct materials cost
Direct labor cost
$
$
Selling price for Job 408
B
Department
Milling
80
5
630
$
95 $
с
Assembly
3
40
240
720
In your worksheet, enter this new data in the cells for Job 407.
What is the new selling price for Job 408? (Round your final answer to 2 decimal places.)
Transcribed Image Text: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 5,000 machine-hours? (Round your final answer to 2
decimal places.)
Selling price for Job 408
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.)
Selling price for Job 408
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