Question
Information pertaining to Radakovich Corporations estimated manufacturing overhead for 2022 is given below. Radakovich uses an activity-based costing (ABC) system to assign manufacturing overhead to
Information pertaining to Radakovich Corporations estimated manufacturing overhead for 2022 is given below. Radakovich uses an activity-based costing (ABC) system to assign manufacturing overhead to products. Among its products is G12B, that the company only manufactures for special orders. BobCo Inc. has requested a bid on 1,000 units of G12B. Radakovichs production managers estimate the order to require 200 machine-hours; 4,500 parts; and 200 inspection-hours. This product's direct costs are estimated to equal $100.00 per unit.
Activity Activity Rate Cost Driver Assembly $30.00 number of machine hours Material Handling $2.00 number of parts Inspection $70.00 number of inspection-hours
Activity Rates are quoted per unit of cost driver activity.
What should Radakovich bid for the special order of G12B (total cost) if its normal practice is to mark up the manufacturing cost of special orders by 60% to cover profit plus marketing and administrative costs. (Round to the nearest $1.00)
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