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.The calculated selling price for Job C is closest to:

A) $87,666
B) $68,920
C) $13,784
D) $82,704

First, we need to calculate the total manufacturing cost for Job C:

Direct materials: $10,000
Direct labor: 200 hours x $12 per hour = $2,400
Manufacturing overhead:
Machine-hours in Department A = 750 hours
Department A predetermined overhead rate = $30 per machine-hour
Department A manufacturing overhead = 750 x $30 = $22,500

Machine-hours in Department B = 1,500 hours
Department B predetermined overhead rate = $20 per machine-hour
Department B manufacturing overhead = 1,500 x $20 = $30,000

Total manufacturing overhead = $22,500 + $30,000 = $52,500

Total manufacturing cost = $10,000 + $2,400 + $52,500 = $65,900

Markup of 20% on manufacturing cost = 20% x $65,900 = $13,180

Selling price = $65,900 + $13,180 = $79,080

Therefore, the closest calculated selling price for Job C is D) $82,704.

Machining Department predetermined overhead rate: Finishing Department predetermined overhead rate: Manufacturing overhead applied to Job C: The selling price for Job C would be calculated as follows: Reference: CH02-Ref33
Collini Corporation has two production departments, Machining and Customizing.The company uses a job-order costing system and computes a predetermined overhead rate in each production department.The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours.At the beginning of the current year, the company had made the following estimates: During the current month the company started and finished Job T268.The following data were recorded for this job: