Question

Mcewan Corporation uses a job order costing system with a single plantwide predetermined overhead rate based on direct labor- hours. The company based its predetermined overhead rate for the current year on 35,000 direct labor hours, total fixed manufacturing overhead cost of $273.000, and a variable manufacturing overhead rate of $3.00 per direct labor hour. Job X941, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data. Total direct labor-hours Direct materials Direct labor cost 250 $ 50 $6,900 Required: Calculate the selling price for Job X941 if the company marks up its unit product costs by 20% (Round your intermediate calculations and final answer to 2 decimal places.) Selling price per unit

Answer 1

Predetermined overhead rate = Estimated overheads/Estimated labor hours + variable rate
=273000/35000 + 3
10.8	per hour
Calculation of Selling price
Direct Material	500
Direct labor cost	6,900
Overhead	2,700
Total cost	10,100
Mark up	2,020
Selling price	12,120

Predetermined overhead rate = Estimated overheads/Estimated labor hours + variable rate 2 =273000/35000 + 3 3 =(273000/35000) + 3 per hour 4 5 Calculation of Selling price 6 Direct Material 500 7 Direct labor cost 6900 8 Overhead =250*A3 =SUM(B6:B8) =B9*20% 9 Total cost 10 Mark up 11 Selling price =B9+B10