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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
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 Departments predetermined overhead rate is based on machine-hours and the Customizing Departments 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 23,000 13,000
Direct labor-hours 20,000 6,000
Total fixed manufacturing overhead cost $ 124,200 $ 27,600
Variable manufacturing overhead per machine-hour $ 1.10
Variable manufacturing overhead per direct labor-hour $ 4.00
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 40
Direct labor-hours 60 50
Direct materials $ 560 $ 160
Direct labor cost $ 740 $ 480
If the company marks up its manufacturing costs by 10% then the selling price for Job A319 would be closest to: (Round your intermediate calculations to 2 decimal places.)Multiple Choice
$3,418
$3,108
$2,825
$283
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