Dancel Corporation has two production departments, Milling and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department’s predetermined overhead rate is based on machine-hours and the Finishing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
| Milling | Finishing |
|---|
| Machine-hours | 17,000 | 14,000 |
|---|
| Direct labor-hours | 1,000 | 6,000 |
|---|
| Total fixed manufacturing overhead cost | $91,800 | $64,200 |
|---|
| Variable manufacturing overhead per machine-hour | $ 2.00 | |
|---|
| Variable manufacturing overhead per direct labor-hour | | $ 3.40 |
|---|
During the current month the company started and finished Job M565. The following data were recorded for this job:
| Job M565: | Milling | Finishing |
|---|
| Machine-hours | 70 | 20 |
| Direct labor-hours | 10 | 40 |
| Direct materials | $ 750 | $ 360 |
| Direct labor cost | $ 340 | $1,360 |
Required:
a. Calculate the total amount of overhead applied to Job M565 in both departments.
b. Calculate the total job cost for Job M565.
c. Calculate the selling price for Job M565 if the company marks up its unit product costs by 20% to determine selling prices.
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