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McLusky Corp makes and sells two types of imaging devices used by medical professionals: MRI scanners and PET scanners. The scanners are made in
McLusky Corp makes and sells two types of imaging devices used by medical professionals: MRI scanners and PET scanners. The scanners are made in McLusky's two business units. In the Manufacturing Division, the base scanners are manufactured in a highly automated production process. In the Customization Division, the scanners are customized to client specifications and thoroughly tested. McLusky uses normal absorption costing to compute scanner costs. Overhead (OH) costs are applied to products using divisional cost pools and overhead rates. In the Manufacturing Division, OH is applied using Machine Hours (MHS). In the Customization Division, OH is applied using Direct Labor Hours (DLHS). OH rates are rounded to the nearest dollar. The following divisional operating and financial data - estimates prepared on 1/1/2020 and actuals prepared after close of business on 12/31/2020 - are available for 2020: Manufacturing Division Customization Division Direct Materials Cost Direct Labor Cost Direct Labor Hours Machine Hours Overhead Estimates Actuals Estimates Actuals 36,200 48,600 $6,340,000 $7,660,000 $7,836,000 $940,000 $988,000 38,634 48,624 $6,788,000 $880,000 $895,000 $2,680,000 $3,011,000 103,100 116,024 10,900 $4,990,000 $4,875,000 11,024 In March 2020, NYU Langone hospital ordered a PET scanner at the quoted price of $350,000. McLusky finished building, customizing, and testing the scanner in October 2020. The scanner was delivered to NYU Langone in November 2020. Operating and financial data about this scanner are below: Manufacturing Division Customization Division Estimates Actuals Estimates Actuals Direct Materials Cost $93,500 $98,642 $7,700 $8,244 Direct Labor Cost $11,600 $10,677 $23,200 $22,889 Direct Labor Hours Machine Hours 460 421 890 842 480 487 90 99 What was the cost of the scanner delivered to NYU Langone in McLusky's normal absorption costing system?
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