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:_______. Total machine-hours 30,300 Total fixed manufacturing overhead cost $575,700 Variable manufacturing overhead per machine-hour $ 4.00 Recently, Job T687 was completed with the following characteristics:_______. Number of units in the job 10 Total machine-hours 30 Direct materials $ 730 Direct labor cost $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:_______.

Answer 1

Answer: $316.80

Step-by-step explanation:

First the total cost for the product = Direct material + Direct labor + Total overhead

Total Overhead;

Estimated Variable Overhead = 4 * 30,300 = $‭121,200‬

Total Overhead = Estimated Variable Overhead + Total fixed manufacturing overhead cost

= ‭121,200‬ + 575,700

= $‭696,900‬

Predetermined Overhead rate = Total Overhead/ Machine hours = ‭696,900‬/30,300

= $23 per hour

Overhead for Job T687 = 23 * 30 = $‭690‬

Total cost = 730 + 1,460 + 690

= $‭2,880‬

Sales price with 40% markup = 2,880 * (1 + 40%)

= $‭3,168‬

Selling price per unit in Job T687;

= ‭3,168‬/10

= $316.80