Carcana Corporation has two manufacturing departments--Machining and Finishing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:
| Machining | Finishing | Total |
|---|
| Estimated total machine-hours (MHs) | 1,000 | 4,000 | 5,000 |
|---|
| Estimated total fixed manufacturing overhead cost | $4,200 | $8,800 | $ 13,000 |
|---|
| Estimated variable manufacturing overhead cost per MH | $ 1.90 | $ 2.90 | |
|---|
During the period, the company started and completed two jobs--Job E and Job G. Data concerning those two jobs follow:
| Job E | Job G |
|---|
| Direct materials | $ 11,800 | $ 8,000 |
|---|
| Direct labor cost | $ 19,200 | $ 6,700 |
|---|
| Machining machine-hours | 700 | 300 |
|---|
| Finishing machine-hours | 1,600 | 2,400 |
|---|
Required:
a. 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 Machining department?
b. 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 Finishing department?
c. 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?
d. 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 G?
e. 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 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job E.
f. 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 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job G.
g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. If both jobs were sold during the month, what was the company's cost of goods sold for the month?
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