Question

In: Accounting

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on...

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 32,000
Total fixed manufacturing overhead cost $ 352,000
Variable manufacturing overhead per machine-hour $ 3.00

Recently, Job T687 was completed with the following characteristics:

Number of units in the job 10
Total machine-hours 40
Direct materials $ 675
Direct labor cost $ 1,350

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.)

Garrison 16e Rechecks 2017-06-22, 2017-08-01

Multiple Choice

  • $283.50

  • $361.90

  • $103.40

  • $546.00

Solutions

Expert Solution

fixed Overhead rate =                 11.00 per machine hr
352000/32000
Variable overhead rate = 3 per machine hr
Computation of job cost
Material $                    675.00
Labor $                 1,350.00
Overhead = $                    560.00
14*40 $                 2,585.00
Mark up @ 40% $                 1,034.00
Sales price - $                 3,619.00
Number of units = 10
Price per unit $                    361.90
answer = $                    361.90

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