Answer:
c. $ 361.90
Explanation:
Computation of Predetermined overhead rate based on machine hours
Estimated fixed machine overhead                           $ 352,000
Estimated Machine Hours                                                32,000 hours
Predetermined overhead rate = Estimated fixed machine overhead/ Estimated Machine hours
$ 352,000 / 32000 machine hours  = $ 11 per machine hour
Computation of total costs of Job T687
Direct materials                                                                                        $   675
Direct labour Cost                                                                                    $ 1,350
Fixed manufacturing overhead $ 11 per machine hour * 40 hours       $   440
Variable manufacturing overhead $ 3 per machine hour * 40 hours   <u>$   120</u>
Total manufacturing cost of Job T 687                                                  $ 2,585
No of units in Job T 687                                                                          10 units     
Average cost per unit                                                                           $ 258.50
Computation of selling price
mark up on cost = 40 %
Selling price per unit     $ 258.50 * 140 %      =                                  $ 361.90