Chapter 2: Applying Excel
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
$35.00
Machine-hours or direct labor-hours for the job
90
20
Manufacturing overhead applied
$765.00
$700.00
Step 4: Calculate the total job cost for Job 407
Milling
Assembly
Direct materials
$800.00
$370.00
Direct labor cost
$70.00
$280.00
Manufacturing overhead applied
$765.00
$700.00
Total cost of Job 407
Step 5: Calculate the selling price for Job 407
Total cost of Job 407
Markup
