Question

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Lupo 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 the following data: Total machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine- hour 32,300 $581,400 $ 2.00 Recently, Job T687 was completed with the following characteristics: 10 Number of units in the job Total machine-hours Direct materials Direct labor cost 40 $ 630 $1,260 If the company marks up its unit product costs by 40% then the selling price for a unit in Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Total Overhead rate = Variable rate + Fixed rate

= 2 + (581,400/32,300)

= 20 per machine hour

Total Cost for the job = Direct Materials + Direct Labor + Overhead

= 630 + 1260 + (40*20) = 2690

Estimated selling price = 2690 + 40% = 3766

Selling price per unit = 3766/10

= 376.60