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Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rat, based on machine-hours
Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rat, based on machine-hours. The company based its predetermined overhead rate for the current year on following data:
Total machine—hours 30,200 Total fixed manufacturing overhead cost , $120,800 Variable manufacturing overhead per machine— $ 6.00 hour
Dnrontiv inh TRR7 vvng completed with the following characteristics:
Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 40 Direct materials $ 710 Direct labor cost $ 1,410 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.)
Expert Solution
Computation of Predetermined Overhead Rate:
Predetermined Overhead Rate = Total Estimated Overhead/Total Machine Hours
Here,
Total Estimated Overhead =Total Variable Overhead +Total Fixed Overhead
= (30,200*$6) + $120,800
= $181,200 + $120,800
= $302,000
Predetermined Overhead Rate = $302,000/30,200 = $10 per machine hour
| Computation of Selling Price of a Unit in Job T687: | |
| Particulars | Amount |
| Direct Material | 710 |
| Direct Labour | 1410 |
| Overhead (40*10) | 400 |
| Total Product Cost | 2520 |
| Selling Price of Job (2520*1.4) (a) | 3528 |
| Units (b) | 10 |
| Selling Price per Unit (a/b) | 352.8 |
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