Aboveboard Inboard and Outboard Motors is a boat dealership. The company sells new and used boats, and provides repair service as well. Suppose you are the manager of used boat sales. One of your primary sources for used boats is the company’s new boat operation, which takes trade-ins. You inspect and make offers on boats traded in. Your cost for each boat includes your offer price plus the parts and labor you purchase from the company’s service operation to recondition the boat, an assignment of “overhead,”

and a sales commission.

Aboveboard’s repair shop charges $30 per hour for labor. Its body shop charges $35 per hour.
You assign “overhead’”—which includes your salary, rent, utilities, advertising, insurance, property taxes, and supplies—equally at a predetermined rate to the boats you sell. You estimated this year’s total of these indirect costs to be $72,800 and total sales for the year to be 520 used boats.

You pay sales personnel strictly on a commission basis at a rate of 10% of sales revenue from the boats they sell. The dealership wants to earn an average of $50 per used boat sold.
Required: Determine the prices to be charged for the five used boats taken in on trade during the second week of August and discuss the similarities and differences between your pricing computations and the procedures of a job order cost accounting system for a manufacturing company. TLK=2