Lupo Corporation uses a job-order costing system with a single plantwide predete

Question

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,200 Total fixed manufacturing overhead cost $ 120,800 Variable manufacturing overhead per machine-hour $ 6.00 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.)

Explanation / Answer

Predetermine overhead rate = (120800/30200)+6 = 10 per machine hour

Selling price per unit = 3528/10 = $352.80

Direct material 710 Direct labour 1410 Overhead (40*10) 400 Total product cost 2520 Selling price of job (2520*1.4) 3528 Unit 10

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