Question

Help Save 8 Mcewan Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor- hours. The company based its predetermined overhead rate for the current year on 48,000 direct labor-hours, total fixed manufacturing overhead cost of $307,200, and a variable manufacturing overhead rate of $2.80 per direct labor-hour. Job X941, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data: 01:18:38 Total direct labor-hours Direct materials Direct labor cost 300 $ 600 $5,500 Required: Calculate the selling price for Job X941 if the company marks up its unit product costs by 20% (Round your intermediate calculations and final answer to 2 decimal places.) Selling price per unit M GE < Prey 8 of 10 Next DO

Answer 1

Estimated total direct labor hours = 48000

Total Estimated fixed manufacturing overhead = $307200

Variable overhead rate = 2.80

Predetermined overhead rate = Total Estimated fixed manufacturing overhead / Estimated direct labor hours + variable rate

Predetermined overhead rate =307200 / 48000 + 2.80 = 6.4 + 2.80 = $9.2 per hour

Calculation of Selling price
Direct Material	$600
Direct labor cost	5500
Overhead cost (9.2 * 300 hrs )	2760
Total product cost	8860
Mark up 20% (8860 * 20%)	1772
Selling price	$10632