Question

TB MC Qu. 2-135 (Algo) Lupo Corporation uses a job-order... 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 Recently, Job T687 was completed with the following characteristics: 30,300 $575, 700 $ 4.00 Number of units in the job Total machine-hours Direct materials Direct labor cost 10 30 $ 730 $1,460 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

Answer)

Calculation of selling price per unit in Job T687

	Amount
Direct materials	$     730.00
Direct labor cost	$ 1,460.00
Variable Manufacturing Overheads (30 machine hours X $ 4.00 per machine hour)	$     120.00
Fixed Manufacturing Overheads (30 machine hours X $ 19.00 per machine hour)	$     570.00
Total product Cost   (A)	$ 2,880.00
Number of units manufactured on the job   (B)	10
Total product Cost per unit     (A/B)	$     288.00
Mark up@ 40% of total cost per unit ($ 288 X 40%)	$     115.20
Selling price per unit	$     403.20

Therefore selling price per unit in Job T687 will be $ 403.20

Working Note:

Calculation of Plantwide predetermined overhead rate for fixed manufacturing overhead cost

Plantwide predetermined overhead rate = Total fixed manufacturing overhead cost/ Total machine hours

                                                                                             = $ 575,700/ 30,300 machine hours

                                                                                              = $ 19.00 per machine hour.