Bundy Car Mechanic Inc.uses a job-order costing system. The company applies all of its overhead costs to jobs using a predetermined overhead ratebased on direct labor-hours. At the beginning of the year, it made the following estimates:

Direct labor-hours required to support estimated output 40,000

Fixed overhead cost $640,000

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 $707

Direct labor cost $230

Direct labor-hours used 9

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

• $937
• $2,295
• $1,635
• $1,090