Answer:
Selling price per unit= $196
Explanation:
<u>First, we need to calculate the predetermined overhead rate:</u>
<u></u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (400,000 / 50,000) + 6
Predetermined manufacturing overhead rate= $14 per machine hour
<u>Now, we can allocate overhead and calculate the total cost:</u>
<u></u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 14*100= $1,400
Total cost= 1,400 + 750 + 2,750
Total cost= $4,900
<u>Finally, the selling price per unit:</u>
<u></u>
Unitary cost= 4,900/40= $122.5
Selling price= 122.5*1.6
Selling price= $196
