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Bundy Car Mechanic Inc. uses a job-order costing system. The company applies all of its overhead costs to jobs using a predetermined overhead rate based
Bundy Car Mechanic Inc. uses a job-order costing system. The company applies all of its overhead costs to jobs using a predetermined overhead rate based on direct labor-hours. At the beginning of the year, it made the following estimates: 32,000 Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour $448,000 1.00 During the year, a customer brought in her car for repairs. The following information was available with respect to the car's repairs: Direct materials $ 609 Direct labor cost $ 166 Direct labor-hours used 5 If Bundy sets its selling prices by adding a markup percentage of 50% of its total job cost, then how much would Bundy have charged this customer for her car's repairs? Multiple Choice $850 $1,275 O $775 $1,125
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