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

A) $5,042.00
B) $4,584.00
C) $3,820.00
D) $764.00

Question

If the company marks up its manufacturing costs by 20% then the selling price for Job A319 would be closest to:A) $5,042.00B) $4,584.00C) $3,820.00D) $764.00

Ripal Patel · Accepted Answer

Final Answer : B, Explanation :  To find the selling price, we need to add the markup to the manufacturing cost of Job A319.Manufacturing cost of Job A319 = $3,820.00Markup = 20% of manufacturing cost = 0.2 * $3,820.00 = $764.00Selling price = manufacturing cost + markup = $3,820.00 + $764.00 = $4,584.00Therefore, the best choice is B) $4,584.00. Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)= $113,400 + ($1.60 per machine-hour × 18,000 machine-hours)= $113,400 +$28,800 = $142,200Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $142,200 ÷ 18,000 machine-hours = $7.90 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.90 per machine-hour × 60 machine-hours = $474Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $64,400 + ($3.90 per direct labor-hour × 7,000 direct labor-hours)= $64,400 + $27,300 = $91,700Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $91,700 ÷7,000 direct labor-hours = $13.10 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.10 per direct labor-hour × 60 direct labor-hours = $786     Reference: CH02-Ref32Sanderlin Corporation has two manufacturing departments--Machining and Finishing.The company used the following data at the beginning of the year to calculate predetermined overhead rates:   During the most recent month, the company started and completed two jobs--Job C and Job L.There were no beginning inventories.Data concerning those two jobs follow:

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

A) $5,042.00
B) $4,584.00
C) $3,820.00
D) $764.00

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