Marder Woodworking Corporation Produces Fine Cabinets

Essay

Marder Woodworking Corporation produces fine cabinets. The company uses a job-order costing system in which its predetermined overhead rate is based on capacity. The capacity of the factory is determined by the capacity of its constraint, which is an automated jointer. Additional information is provided below for the most recent month:
Required:
a. Calculate the predetermined overhead rate based on capacity.
b. Calculate the manufacturing overhead applied.
c. Determine the Gross Margin for the month.
d. Calculate the cost of unused capacity.