If the company marks up its manufacturing costs by 40% then the selling price for Job T268 would be closest to:

A) $1,932.40
B) $6,763.40
C) $4,831.00
D) $7,440.00

Question

If the company marks up its manufacturing costs by 40% then the selling price for Job T268 would be closest to:A) $1,932.40B) $6,763.40C) $4,831.00D) $7,440.00

javier Garcia · Accepted Answer

Final Answer : B, Explanation :  Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)= $102,000 + ($1.70 per machine-hour × 17,000 machine-hours)= $102,000 +$28,900 = $130,900Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $130,900 ÷ 17,000 machine-hours = $7.70 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.70 per machine-hour × 80 machine-hours = $616Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $61,200 + ($4.10 per direct labor-hour × 6,000 direct labor-hours)= $61,200 + $24,600 = $85,800Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $85,800 ÷6,000 direct labor-hours = $14.30 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.30 per direct labor-hour × 50 direct labor-hours = $715     Reference: CH02-Ref34Heroux Corporation has two manufacturing departments--Forming and Customizing.The company used the following data at the beginning of the year to calculate predetermined overhead rates:   During the most recent month, the company started and completed two jobs--Job A and Job H.There were no beginning inventories.Data concerning those two jobs follow:

If the company marks up its manufacturing costs by 40% then the selling price for Job T268 would be closest to:

A) $1,932.40
B) $6,763.40
C) $4,831.00
D) $7,440.00

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