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Madole Corporation has two production departments, Forming and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production
Madole Corporation has two production departments, Forming and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: | ||||
Forming | Customizing | |||
Machine-hours | 12,000 | 2,000 | ||
Direct labor-hours | 3,000 | 9,000 | ||
Total fixed manufacturing overhead cost | $156,000 | $60,000 | ||
Variable manufacturing overhead per machine-hour | $2.00 | |||
Variable manufacturing overhead per direct labor-hour | $4.00 | |||
During the current month the company started and finished Job K973. The following data were recorded for this job: | ||||
Job K973: | Forming | Customizing | ||
Machine-hours | 70 | 15 | ||
Direct labor-hours | 10 | 60 | ||
Direct labor rate per hour | $ 15 | $ 20 | ||
Direct materials used | $ 500 | $ 700 |
4. If there is a pricing policy of charging a mark-up plus of 65%, what is the price of this job?
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