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 26,000 29,000
Direct labor-hours 11,000 5,000
Total fixed manufacturing overhead cost $ 153,400 $ 18,500
Variable manufacturing overhead per machine-hour $ 1.30
Variable manufacturing overhead per direct labor-hour $ 5.00
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 70 30
Direct labor-hours 50 60
Direct materials $ 450 $ 190
Direct labor cost $ 580 $ 570
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
a. $563
b. $2,816
c. $3,379
d. $4,055