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 42,000 direct labor-hours, total fixed manufacturing overhead cost of $361,200, and a variable manufacturing overhead rate of $2.40 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		200
Direct materials	$	400
Direct labor cost	$	5,900

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

Denominator Level of Activity	42,000 DLH
Variable Overhead Cost (42,000 x $2.40)	$100,800
Fixed Overhead Cost	$361,200
Total	$462,000
Predetermined overhead rate =	Total budgeted Overhead/ Total budgeted hours
	$462,000/42,000
	$11.00
Direct materials	$400
Direct labor cost	$5,900
Ovrehead applied (200 x $11.00)	$2,200
Total manufacturing cost	$8,500
Add: Markup 20%	$1,700
Selling price for Job X941	$10,200
Units	$50
Selling price per unit	$204.00