Sutter Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours.The company based its predetermined overhead rate for the current year on the following data: Recently, Job T369 was completed with the following characteristics: If the company marks up its unit product costs by 20% then the selling price for a unit in Job T369 is closest to:
A)$324.56
B)$304.56
C)$277.20
D)$50.76

Question

Sutter Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours.The company based its predetermined overhead rate for the current year on the following data:  Recently, Job T369 was completed with the following characteristics:  If the company marks up its unit product costs by 20% then the selling price for a unit in Job T369 is closest to:
A)$324.56 
B)$304.56 
C)$277.20 
D)$50.76

Quizplus · Accepted Answer

Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base)= $35,000 + ($2.20 per machine-hour × 10,000 machine-hours)= $35,000 + $22,000 = $57,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $57,000 ÷ 10,000 machine-hours = $5.70 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $5.70 per machine-hour × 40 machine-hours = $228 11ea7998_5f5b_c129_911b_af772afdf885_TB2627_00_TB2627_00 11ea7998_5f5b_e83a_911b_e740a1f0e1e4_TB2627_00_TB2627_00 11ea7998_5f5c_0f4b_911b_4b441e825017_TB2627_00_TB2627_00

Sutter Corporation Uses a Job-Order Costing System with a Single