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

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 17E: Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the...

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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

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.)

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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