Question

Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system...

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

Homework Answers

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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