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4 September, 22:29

based on machine-hours. The company based its predetermined overhead rate for the current year on the following dа ta:Total machine-hours 32,000Total fixed manufacturing overhead cost $ 352,000Variable manufacturing overhead per machine-hour $ 3.00Recently, Job T687 was completed with the following characteristics:Number of units in the job 10Total machine-hours 40Direct materials $ 675Direct labor cost $ 1,350If 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.) a. $283.50b. $103.40c. $361.90d. $546.00

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  1. 4 September, 22:53
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    c. $ 361.90

    Explanation:

    Computation of Predetermined overhead rate based on machine hours

    Estimated fixed machine overhead $ 352,000

    Estimated Machine Hours 32,000 hours

    Predetermined overhead rate = Estimated fixed machine overhead / Estimated Machine hours

    $ 352,000 / 32000 machine hours = $ 11 per machine hour

    Computation of total costs of Job T687

    Direct materials $ 675

    Direct labour Cost $ 1,350

    Fixed manufacturing overhead $ 11 per machine hour * 40 hours $ 440

    Variable manufacturing overhead $ 3 per machine hour * 40 hours $ 120

    Total manufacturing cost of Job T 687 $ 2,585

    No of units in Job T 687 10 units

    Average cost per unit $ 258.50

    Computation of selling price

    mark up on cost = 40 %

    Selling price per unit $ 258.50 * 140 % = $ 361.90
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