TB Problem Qu.2-281 (Algo) Harnett Corporation Has Two Manufacturing (Solution)

TB Problem Qu. 2-281 (Algo) Harnett Corporation has two manufacturing... 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) 4,000 6,000 10,000 Estimated total fixed manufacturing overhead cost $20,400 $37,800 $58,200 Estimated variable manufacturing overhead cost per MH $3.00 $6.00   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 $13,700 $8,000 Direct labor cost $21,200 $8,100 Molding machine-hours 2,500 1,500 Assembly machine-hours 2,500 3,500   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.)   Solution: Department Est. FMOH Est. VMOH Est. MOH Molding $20,400 ($3 x 4000) $32,400 Assembly $37,800 ($6x6000) $73,800 Total $106,200 Plantwide overhead rate = $106,200 / 10,000 MHs = $10.62 per MH 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.)   Solution: Job E: 2,500 Molding MHs + 2,500 Assembly MHs = 5,000 MHs Overhead applied to Job E = 5,000 MHs x $10.62 per MH = $53,100 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.)   Solution: Cost Element Job E DM $13,700 DL $21,200 MOH $53,100 Total Mfg Cost $88,000 Key Observations: The solution is handwritten and well-organized. It correctly calculates the plantwide overhead rate. It accurately applies the overhead rate to Job E based on the total machine-hours used. It correctly calculates the total manufacturing cost for Job E. Potential Improvements: While the solution is correct, it could benefit from more detailed explanations of the calculations. Using a calculator or spreadsheet software could improve the presentation and reduce the risk of errors. d. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. (Do not round intermediate calculations.)   Total Mfg Cost $88,000 x 1.80 = $158,400 Selling Price for Job E. 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.)   Est. FMOH $20,400 Est. VMOH 12,000 ($3/MH x 4000 MHs) Est. MOH $32,400 Est. Total MHs 4,000 MHs Dept. OH rate $32,400 / 4,000 MHs = $8.10 per MH. 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.)   Est. FMOH $37,800 Est. VMOH 36,000 ($6/MH x 6000 MHs) Est. MOH $73,800 Total MHs 6000 MHs Dept. OH rate $73,800 / 6000 MHs = $12.30 per MH 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.)   Job E Molding $8.10/MH x 2500 MHs = $20,250 Assembly $12.30/MH x 2500 MHs = $30,750 Total MOH applied to Job E $51,000 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 80% on manufacturing cost to establish selling prices. Calculate the selling price for Job E. (Do not round intermediate calculations.)   DM $13,700 DL 21,200 MOH 51,000 Total Mfg Cost $85,900 x 1.80 = $154,620 (Markup 80%)