Question
Get Reel, Inc. is a manufacturer of fishing rods. The company produces the rods in small batches based on customer specifications. At the beginning of
Get Reel, Inc. is a manufacturer of fishing rods. The company produces the rods in small batches based on customer specifications. At the beginning of the year, Get Reel estimated total manufacturing overhead of $48,500, total direct labor hours of 10,000 and total machine hours of 2,000. The company uses a traditional, normal costing system and allocates manufacturing overhead to production using the most appropriate allocation base for its labor intensive manufacturing environment.
During January, Get Reel started and finished Job Santiago. The job consisted of 10 identical fishing rods sold at a sales price of $1,100 per rod. A total of $2,000 in direct materials were requisitioned for the job during the month. Direct laborers worked a total of 16.0 hours on the job and were paid at a rate of $18 per direct labor hour. The job required 2.0 hours of machine time. Assuming 6 of the rods were sold during January, what is the total gross profit reported on the job during the month?
A. $5,180.64
B. $5,174.82
C. $5,183.55
D. $5,198.10
E. $5,342.64
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