Confused. Answer was 80,000 but I don\'t understand why markup rate isn\'t inclu
ID: 2385764 • Letter: C
Question
Confused. Answer was 80,000 but I don't understand why markup rate isn't included in the cost..Joni's Kitty Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Mouse product. Estimates for this order include:
Direct materials $40,000;
500 direct manufacturing labor-hours at $20 per hour;
and a 20% markup rate on total manufacturing costs.
Estimated total product costs for this special order equal:
A) $80,000
B) $96,000
C) $50,000
D) None of these answers is correct.
Explanation / Answer
Estimated total product costs for this special order equal:
A) $80,000
B) $96,000
C) $50,000
D) None of these answers is correct.
DM 40,000 +DL (500 X $ 20 + MOH( $30 000)= $ 80,000