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Zanzabum
3 years ago
5

Joni's Kitty Supplies applies manufacturing overhead costs to products at a budgeted indirect - cost rate of $60 per direct manu

facturing labor - hour. A retail outlet has requested a bid on a special order of the Toy Mouse product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing labor - hours at $20 per hour; and a 20% markup rate on total manufacturing costs. The bid price for this special order is:
Business
1 answer:
astra-53 [7]3 years ago
8 0

Answer:

Bid price =  N96,000

Explanation:

<em>Mark up is  profit expressed as a percentage of cost. Bid price will be equal to the manufacturing cost plus the mark up profit.</em>

Bid price is the total manufacturing cost + (20% of the manufacturing cost )

<em>Manufacturing cost = D. materials cost + D. Labour cost + Manufacturing Overheads</em>

Manufacturing cost= 40,000 + (500 × $20 ) + ( 500× $60)

                                = 80000

Bid price = 80,000 + (20% × 80,000)

              =  N96,000

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Giving the following information:

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