Wood Manufacturing is a small textile manufacturer using machineminushours as th

Question

Wood Manufacturing is a small textile manufacturer using machineminushours as the single, plantminuswide predetermined cost driver rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Winfield High School band jacket job: Company Winfield High School Job Direct materials $40,000 $1,000 Direct labor $10,000 $ 200 Manufacturing overhead costs $30,000 Machineminushours 100,000 900 What is the bid price for the Winfield High School Job if the company uses a 40% markup of total manufacturing costs? A. $2,310 B. $588 C. $1,680 D. $2,058

Explanation / Answer

Direct materials 1000 Direct labor 200 Manufacturing overhead costs 270 =30000/100000*900 Tota costs 1470 Add: Markup 588 =1470*40% Bid price 2058 Option D is correct

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