Just for the Halibut, Inc. designs and manufactures custom made fishing rods. On

Question

Just for the Halibut, Inc. designs and manufactures custom made fishing rods. On June 1, it had one job started with a beginning Work in Process balance of $583. During June the job was finished and sold. Direct labor for the job in June was $75 and direct materials used were $60. Direct laborers are paid a wage rate of $15 per hour and manufacturing overhead is applied to production at a rate of $10 per direct labor hour. The company marks up costs 35% to determine the selling price. What was the selling price of the job?

Explanation / Answer

Calculate selling price of job :

Beginning work in process 583 Direct material 60 Direct labour 75 Manufacturing overhead (10*5) 50 Total manufacturing cost 768 Markup (768*35%) 269 Selling price of job 1037

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