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Problem - Kluth Corporation has two manufacturing departments-Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
Molding
Customizing
Total
Estimated total machine-hours
9,000
3,600
12,600
Estimated total fixed manufacturing overhead cost
$36,000
$13,320
$49,320
Estimated variable manufacturing overhead cost per MH
$2.50
$3.00
During the most recent month, the company started and completed two jobs-Job C and Job M. There were no beginning inventories Data concerning those two jobs follow:
Job C
Job M
Direct materials
$16,700
$9,900
Direct labor cost
$23,400
$10,300
Molding machine-hours
2,700
1,300
Customizing machine - hours
400
600
Required: 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 prices for Job C and for Job M.
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