Question

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: If the company marks up its unit product costs by 40% then the selling price for a unit in Job T687 is closest to:

Answer 1

a. $259.70

Step-by-step explanation:

Note: The full question is attached as picture below

Predetermined overhead rate = 2 + (294300/32700)

Predetermined overhead rate = $11

Job T687 Total cost = Direct materials cost + Direct labor cost + Overhead applied

Job T687 Total cost = 545 + 1090 + (20*11)

Job T687 Total cost = 545 + 1090 + 220

Job T687 Total cost = 1855

Cost per unit = $1,855 / $10

Cost per unit = $185.5

Selling price per unit = Cost per unit + Mark-up price

Selling price per unit = $185.5 + $185.5*40%

Selling price per unit = $185.5 + $74.20

Selling price per unit = $259.70