Koelsch Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Customizing Total Estimated total machine-hours (MHs) 1,000 9,000 10,000 Estimated total fixed manufacturing overhead cost $ 4,000 $ 25,200 $ 29,200 Estimated variable manufacturing overhead cost per machine-hour $ 2.00 $ 3.00 During the most recent month, the company started and completed two jobs--Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job F Job K Direct materials $ 12,300 $ 8,400 Direct labor cost $ 18,200 $ 6,800 Molding machine-hours 700 300 Customizing machine-hours 3,600 5,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job K is closest to: (Round your intermediate calculations to 2 decimal places.)
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Koelsch Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined
| Molding | Customizing | Total | |
|---|---|---|---|
| Estimated total machine-hours (MHs) | 1,000 | 9,000 | 10,000 |
| Estimated total fixed manufacturing overhead cost | $ 4,000 | $ 25,200 | $ 29,200 |
| Estimated variable manufacturing overhead cost per machine-hour | $ 2.00 | $ 3.00 |
During the most recent month, the company started and completed two jobs--Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow:
| Job F | Job K | |
|---|---|---|
| Direct materials | $ 12,300 | $ 8,400 |
| Direct labor cost | $ 18,200 | $ 6,800 |
| Molding machine-hours | 700 | 300 |
| Customizing machine-hours | 3,600 | 5,400 |
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on
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