Stockmaster Corporation has two manufacturing departments--Forming and Assembly.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 C and Job H.There were no beginning inventories.Data concerning those two jobs follow: Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices.The calculated selling price for Job C is closest to:

A) $96,989
B) $88,172
C) $25,192
D) $62,980

Predetermined overhead rate based on machine-hours = (Total estimated manufacturing overhead cost) / (Total estimated machine-hours) = ($510,000 + $102,000) / 25,500 = $22 per machine-hour

Job C:
Total manufacturing cost = Direct materials + Direct labor + Manufacturing overhead = $18,450 + $13,400 + ($22 x 990) = $41,340
Markup on manufacturing cost = 40%
Selling price = Manufacturing cost x (1 + Markup) = $41,340 x 1.4 = $57,876

Job H:
Total manufacturing cost = Direct materials + Direct labor + Manufacturing overhead = $21,500 + $12,100 + ($22 x 1,980) = $63,260
Markup on manufacturing cost = 40%
Selling price = Manufacturing cost x (1 + Markup) = $63,260 x 1.4 = $88,172

Therefore, the calculated selling price for Job C is closest to $57,876, which is option B.

The first step is to calculate the estimated total overhead costs in the two departments.
Forming Assembly The second step is to combine the estimated manufacturing overhead costs in the two departments ($32,500 + $24,500 = $57,000)to calculate the plantwide predetermined overhead rate as follow: The overhead applied to Job C is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $5.70 per MH x (3,400 MHs + 2,000 MHs)
= $5.70 per MH x (5,400 MHs)
= $30,780
Job C's manufacturing cost: The selling price for Job C: