Question

Cull 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 total fixed manufacturing overhead cost of $442,500, variable manufacturing overhead of $2.50 per machine-hour, and 59,000 machine-hours. The company has provided the following data concerning Job X455 which was recently completed:
Number of units in the job 10
Total machine-hours 80
Direct materials $ 870
Direct labor cost $ 1,740

If the company marks up its unit product costs by 20% then the selling price for a unit in Job X455 is closest to:

Answer 1

Answer:

Explanation:

Direct materials cost per unit = direct materias cost/number of units = 870/10 = $87

Selling price ofr Job X455:

Direct material/unit $87

Direct labor/unit 174 [1740/10]

Variable overhead per unit [2.50*80/10] 20

Fixed manufacturing overhead per unit [442,500/59,000 *8] 60

Total cost per unit $341

Mark up 68.2 [341*0.20]

Selling price $409.2