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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:
Direct labor-hours required to support estimated output | 28,000 | |
Fixed overhead cost | $ | 364,000 |
Variable overhead cost per direct labor-hour | $ | 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 | $ | 777 |
Direct labor cost | $ | 215 |
Direct labor-hours used | 2 | |
If Bundy sets its selling prices by adding a markup percentage of 30% of its total job cost, then how much would Bundy have charged this customer for her car's repairs?
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