Question
In: Accounting
Wisconsin Electronics has received an order for 1,000 specially designed TV/VCR combinations. The following standards were...
Wisconsin Electronics has received an order for 1,000 specially designed TV/VCR combinations. The following standards were compiled for this order: Direct materials: Part #123 $25 per TV/VCR Part #456 $50 per TV/VCR Direct labor: 2.0 hours per TV/VCR at $15 per hour Manufacturing overhead: $40 per direct labor hour Assume the company adds a 10% markup to arrive at a selling price. The bid price for this order totals: A. $203,500. B. $115,500. C. $185,000. D. $80,000.
Solutions
Expert Solution
All Workings form part of the answer
-Working and Answer
| Costs | Workings | Amount |
| Direct Material: | ||
| Part #123 | [1000 TV/VCRs x $ 25] | $ 25,000.00 |
| Part #456 | [1000 TV/VCRs x $ 50] | $ 50,000.00 |
| Direct Labor | ]2 hours x 1000 TV/VCR x $ 15 per hour] | $ 30,000.00 |
| Manufacturing Overhead | [$ 40 x 2 hours x 1000 TV/VCR] | $ 80,000.00 |
| Total Cost assigned | $ 185,000.00 | |
| Mark Up of 10% | $ 18,500.00 | |
| Bid Price for Order | $ 203,500.00 | |
| CORRECT ANSWER | Option 'A': $ 203,500 | |
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