Harnett Corporation has two manufacturing departments--Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates: Molding Assembly Total Estimated total machine-hours (MHs) 5,000 5,000 10,000 Estimated total fixed manufacturing overhead cost $ 18,000 $ 29,000 $ 47,000 Estimated variable manufacturing overhead cost per MH $ 1.50 $ 3.00 During the period, the company started and completed two jobs--Job E and Job M. Data concerning those two jobs follow: Job E Job M Direct materials $ 13,900 $ 8,200 Direct labor cost $ 21,400 $ 8,200 Molding machine-hours 1,250 3,750 Assembly machine-hours 1,250 3,750 Required: a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.) b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job E. (Do not round intermediate calculations.) c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job E. (Do not round intermediate calculations.) d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. (Do not round intermediate calculations.) e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Molding department? (Round your answer to 2 decimal places.) f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Assembly department? (Round your answer to 2 decimal places.) g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job E? (Do not round intermediate calculations.) h. 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 price for Job E. (Do not round intermediate calculations.) e.Molding predetermined overhead rate per MH? f.Assembly predetermined overhead rate per MH? g.Manufacturing overhead applied job E? h.Selling price for job E?
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.
Harnett Corporation has two manufacturing departments--Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates:
| Molding | Assembly | Total | ||||
| Estimated total machine-hours (MHs) | 5,000 | 5,000 | 10,000 | |||
| Estimated total fixed manufacturing overhead cost | $ | 18,000 | $ | 29,000 | $ | 47,000 |
| Estimated variable manufacturing overhead cost per MH | $ | 1.50 | $ | 3.00 | ||
During the period, the company started and completed two jobs--Job E and Job M. Data concerning those two jobs follow:
| Job E | Job M | |||
| Direct materials | $ | 13,900 | $ | 8,200 |
| Direct labor cost | $ | 21,400 | $ | 8,200 |
| Molding machine-hours | 1,250 | 3,750 | ||
| Assembly machine-hours | 1,250 | 3,750 | ||
Required:
a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.)
b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job E. (Do not round intermediate calculations.)
c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total
d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. (Do not round intermediate calculations.)
e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Molding department? (Round your answer to 2 decimal places.)
f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Assembly department? (Round your answer to 2 decimal places.)
g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job E? (Do not round intermediate calculations.)
h. 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 price for Job E. (Do not round intermediate calculations.)
e.Molding predetermined overhead rate per MH?
f.Assembly predetermined overhead rate per MH?
g.Manufacturing overhead applied job E?
h.Selling price for job E?
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