Answer and Explanation:
1. The computation of plantwide predetermined overhead rate is shown below:-
(Fixed manufacturing overhead cost ÷ Machine-hours) + Variable manufacturing overhead cost per machine-hour
= ($651,000 ÷ 159,000) + $4.60
= $8.69
2. The total manufacturing cost assigned to Job 400 is shown below:-
Total manufacturing cost assigned to Job 400 = Direct material + Direct labor + Manufacturing overhead
= $370 + $300 + (34 × $8.69)
= $370 + $300 + $295.46
= $965.46
3. The unit product cost is shown below:-
Unit product cost = Total manufacturing cost assigned to Job 400 ÷ Number of units
= $965.46 ÷ 60
= $16
4. The selling price per unit is shown below:-
Selling price per unit = Unit product cost + (Unit product cost × markup percentage)
= $16 + ($16 × 120%)
= $16 + $19.2
= $35.2 per unit
5. As the absorption costing method is chosen so it also considered the fixed also it fails to generate the good analysis for variable costing
