Lotz Corporation has two manufacturing departments--Casting and Finishing.The company used the following data at the beginning of the year to calculate predetermined overhead rates: During the most recent month, the company started and completed two jobs--Job F and Job K.There were no beginning inventories.Data concerning those two jobs follow: 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 F is closest to:

A) $30,220
B) $90,660
C) $60,440
D) $96,100

Question

Lotz Corporation has two manufacturing departments--Casting and Finishing.The company used the following data at the beginning of the year to calculate predetermined overhead rates:

During the most recent month, the company started and completed two jobs--Job F and Job K.There were no beginning inventories.Data concerning those two jobs follow:

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 F is closest to:

A) $30,220
B) $90,660
C) $60,440
D) $96,100

Zybrea Knight · Accepted Answer

Final Answer : B, Explanation :  Casting Department predetermined overhead rate:   Finishing Department predetermined overhead rate:   Manufacturing overhead applied to Job F:   The selling price for Job F would be calculated as follows:

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