Question

Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:

	Milling		Customizing
Machine-hours		16,000		23,000
Direct labor-hours		6,000		9,000
Total fixed manufacturing overhead cost	$	92,800	$	36,000
Variable manufacturing overhead per machine-hour	$	1.90
Variable manufacturing overhead per direct labor-hour			$	3.40

During the current month the company started and finished Job A319. The following data were recorded for this job:

Job A319:	Milling		Customizing
Machine-hours		50		10
Direct labor-hours		30		30
Direct materials	$	410	$	180
Direct labor cost	$	760	$	540

If the company marks up its manufacturing costs by 20% then the selling price for Job A319 would be closest to: (Round your intermediate calculations to 2 decimal places.)

Garrison 16e Rechecks 2017-06-22, Garrison 16e Rechecks 2019-08-02

Multiple Choice

• $3,596

• $2,996

• $2,497

• $499

Answer 1

Solution:-

If the company marks up its manufacturing costs by 20% then the selling price for Job A319 would be closest to:-

$2,996

Explanation:-

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