TB Problem Qu. 2-272 Kluth Corporation has two manufacturing ... Kluth Corporation has two manufacturing...
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TB Problem Qu. 2-272 Kluth Corporation has two manufacturing ...
Kluth 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)
7,000
3,800
10,800
Estimated total fixed manufacturing overhead cost
$
18,200
$
7,600
$
25,800
Estimated variable manufacturing overhead cost per MH
$
1.50
$
5.00
During the most recent month, the company started and completed two jobs--Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow:
Job C
Job M
Direct materials
$
16,900
$
10,300
Direct labor cost
$
23,600
$
10,600
Molding machine-hours
1,250
5,750
Customizing machine-hours
3,300
500
Required:
Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M.
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