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Use the information below to answer the two questions that follow. A local company uses job-order costing and manufactures its products in two departments:
Use the information below to answer the two questions that follow. A local company uses job-order costing and manufactures its products in two departments: Cutting and Sewing. At the beginning of the most recent period, the company estimated the following: Estimated Direct labor-hours (DLH) Estimated Machine-hours (MH) Estimated Manufacturing overhead (MOH) cost Cutting 40,000 Sewing 12,000 10,000 $260,000 50,000 $400,000 Because of an increase in demand, activity and cost for the period was higher than expected. Actual data are shown below. Actual Direct labor-hours (DLH) Actual Machine-hours (MH) Actual Manufacturing overhead (MOH) cost Cutting Sewing 45,000 14,000 15,000 60,000 $300,000 $410,00 The company is looking to price a product it produced for a customer as Job # 2430. Actual results for this job are: Job #7430 Materials Cost Direct Labor Cost DLHS MHs Cutting $1,200 Sewing $2,600 630 $147 30 3 7 25 Q.) If the company applies MOH using a plant-wide Predetermined Overhead Rate (POHR) based on MHs and prices its products using a markup of 40%, what price would the company charge for Job # 2430? (Round your answer to the nearest cent) A) $[
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