Answer:
Total cost= $24,680
Selling price= $31,590.4
Explanation:
Giving the following information:
Estimated overhead costs= $586,600
Estimated direct labor hours= 41,900
Estimated direct labor costs= $1,592,200 ($38 per hour)
Job 304:
The job used 190 direct labor hours
$14,800 of direct materials.
The City of Jonestown has contracted to purchase the playground equipment for 28% over manufacturing cost.
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 586,600/41,900
Predetermined manufacturing overhead rate= $14 per direct labor hour
Now, total cost of Job 304:
Total cost= direct material + direct labor + allocated overhead
Total cost= 14,800 + (38*190) + (14*190)
Total cost= $24,680
Finally, the selling price:
Selling price= 24,680*1.28= $31,590.4
