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 50% on manufacturing cost to establish selling prices. The calculated selling price for Job M is closest to:

Selling Price for Job M = $49,005

Explanation:

Note: This question is incomplete and lacks necessary data to solve. But I have found similar question on the internet and will be using its data to solve this question for the sake of understanding and concept.

Data Missing:

Estimated Total Machine Hours for Molding = 9000

Estimated Total Machine Hours for Customizing = 3600

Total = 9000 + 3600 = 12,600

Estimated Total Fixed manufacturing overhead cost for Molding = 36000

Estimated Total Fixed manufacturing overhead cost for Customizing = 13,320

Total = 36000 + 13320 = 49320

Estimated variable Manufacturing overhead cost per MH for Molding =  2.50

Estimated variable Manufacturing overhead cost per MH for Customization = 3.00

Data For JOB M:

Direct materials = $9,900

Direct labor Cost = $10,300

Molding Machine-hours = 1300

Customizing Machine Hours = 600

Required:

We are asked to calculate the selling price for Job M:

Solution:

Direct materials = $9,900

Direct labor Cost = $10,300

Variable manufacturing overhead For Molding:

(Estimated variable Manufacturing overhead cost per MH for Molding 2.50 x Molding Machine-hours = 1300)

Molding = 2.50 x 1300

Molding = 3,250

Similarly,

Variable manufacturing overhead For Customizing:

(Estimated variable Manufacturing overhead cost per MH for Customization = 3.00 x Customizing Machine Hours = 600)

Customizing = 3.00 x 600

Customizing = 1800

Now, we need to find Fixed manufacturing overhead for both molding and customizing:

For Molding:

First we need to find the cost per machine hour for molding:

Molding Cost per machine hour = (Estimated Total Fixed manufacturing overhead cost for Molding = 36000 / Estimated Total Machine Hours for Molding = 9000)'

Molding Cost per machine hour = 36000/9000

Molding Cost per machine hour = $4 per machine hour

So,

Fixed manufacturing overhead for Molding:

Molding = Molding Cost per machine hour x Molding Machine-hours = 1300

Molding = 4 x 1300

Molding = 5200

Similarly,

For Customizing:

Customizing Cost per machine hour = 13320/3600

Customizing Cost per machine hour = $3.70 per machine hour

Fixed manufacturing overhead for Customizing:

Customizing = Customizing Cost per machine hour x Customizing Machine Hours

Customizing = $3.70 x 600

Customizing = 2220

Now, we need to find the total cost for Job M:

Total Cost = Direct materials + Direct labor Cost  + Variable manufacturing overhead For Molding + Variable manufacturing overhead For Customizing + Fixed manufacturing overhead for Molding + Fixed manufacturing overhead for Customizing

Total Cost =  $9,900 + $10,300 + 3,250 + 1800 + 5200 + 2220

Total Cost = $32,670

Now, we need to find the Selling price for Job M, for which we need to add the markup into the total cost.

Markup percentage = 50%

So,

Markup = Markup% x Total Cost

Markup = 0.50 x 32,670

Markup = $16,335

Selling Price = Markup + Total Cost

Selling Price for Job M = $16,335 + $32,670

Hence,

Selling Price for Job M = $49,005

c

explanation: