Question

Cull Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $465,000, variable manufacturing overhead of $2.10 per machine-hour, and 75,000 machine-hours. The company has provided the following data concerning Job X455 which was recently completed: Number of units in the job 10 Total machine-hours 80 Direct materials $ 750 Direct labor cost $ 1,500 If the company marks up its unit product costs by 20% then the selling price for a unit in Job X455 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple

Answer 1

Answer:

$3,496.80

Explanation:

total predetermined overhead rate = ($465,000 / 75,000 machine hours) + $2.10 per machine hour = $6.20 + $2,10 = $8.30

total costs related to Job 10:

• Direct materials $750
• Direct labor cost $1,500
• manufacturing overhead $8.30 x 80 = $664
• total $2,914

markup = (sales price - unit cost) / unit cost

20% = (sales price - $2,914) / $2,914

$582.80 = sales price - $2,914

sales price = $3,496.80