Nielsen Corporation Has Two Manufacturing Departments--Machining and Assembly

question 63

Multiple Choice

Nielsen Corporation has two manufacturing departments--Machining 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 F and Job M. 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 M is closest to:

• A) $46,154
• B) $41,958
• C) $29,970
• D) $11,988

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Definitions:

Breakeven Volume

The quantity of output or sales at which total revenues equal total costs, resulting in no profit or loss.

Sales Revenues

The total amount of money generated from sales of goods or services by a company before any expenses are subtracted.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and generate profit.

Direct Cost

A direct cost is an expense that can be directly attributed to the production of specific goods or services, such as raw materials and labor.