Job 215 was started and completed during the year. What price would have been charged to the customer if the job required $3,600 in direct materials and $4,900 in direct labor cost and the company priced its jobs at 45% above the job’s cost according to the accounting system? (Round your answer to the nearest dollar.)

Its predetermined overhead rate was based on a cost formula that estimated $121,800 of manufacturing overhead for an estimated allocation base of $87,000 direct material dollars to be used in production.

Explanation:

We have to calculate the overhead rate and also, the allocate overhead into job 215

expected overhead / cost driver(direct labor cost) = overhead rate

121,800 / 87,000 = 1.4

factory overhead for the job:

direct labor cost x overhead rate =

4,900 x 1.4 = 6,860

Total cost of the job 215

direct materials 3,600

factory overhead 6,860

direct labor 4,900

total cost 15,360

45% mark up 6,912‬

sales price 22,272‬

suchetasVT suchetasVT · Answer 2 · 2025-05-01T14:18:46-04:00

The selling price fixed by the company for the customer at $ 22,272.It involves looking at the direct and indirect costs and is usually divided into three specific categories: labor, building materials, and higher costs.

What is Job costing?

Job costing is the method designed to help you track the cost of individual projects and activities.

It involves looking at the direct and indirect costs and is usually divided into three specific categories: labor, building materials, and higher costs.

As per the given information, the predetermined overhead rate was based on a cost formula that estimated $121,800 of manufacturing overhead for an estimated allocation base of $87,000 direct material dollars to be used in production.

Calculation of overhead rate and allocate overhead rate into job 215:

[tex]\rm\,Overhead\,rate = \dfrac{Expected\,overhead}{cost\,driver(direct\,labor\,cost)} \\= \dfrac{121,800}{87,000} \\Factory overhead = direct\,labor\,cost \times \rm\,overhead\,rate\\= 4,900 x 1.4 = 6,860\\[/tex]

[tex]\rm\,Total\,cost\, = direct\,materials + factory\,overhead + direct\,labor \\\\= \$ 3,600 + \$6,860+ \$ 4,900 \\ \\Total\,cost = \$ 15,360[/tex]

Now, calculating the selling price of the job, that is fixed by the company at 45% and above the total cost:

[tex]\rm\,Selling\,Price\,fixed\,for\,the\,job = Total\,Cost\, + (45\%\times total\,cost)\\\\\\Selling\,Price\,fixed\,for\,the\,job= \$ 6,912 + \$ 15,360\\\\\\Selling\,Price\,fixed\,for\,the\,job= \$ 22,272\\[/tex]

Hence, the sales price that the company can fix for its customer at $22,272.

To learn more about job costing, refer to the link:

https://brainly.com/question/24516871