00:01
We need to evaluate the selling price for each.
00:03
So the first one is using direct labor hours.
00:15
So under it, we will first evaluate predetermined overhead rate.
00:31
So it is evaluated as total fixed manufacturing overhead cost, which is of the value $7 ,84 ,000 wherein we add variable manufacturing overhead cost per dlh, which is $2 wherein we multiply it by estimated dlh, which is of the value $1 ,40 ,000, which is then divided by $1 ,40 ,000.
01:02
So equating it, we get $10 ,64 ,000 divided by $1 ,40 ,000.
01:16
So it is $7 .60 per dlh.
01:23
Then evaluating total manufacturing cost.
01:34
So it is evaluated as direct material cost, which is $175 wherein we add direct labor cost, which is $225 wherein we add predetermined overhead rate, which is of the value $7 .60 multiplied by actual dlh, which is of the value $15.
01:56
So equating it, we get $514.
02:02
Then selling price is evaluated as total manufacturing cost, which is $514 wherein we multiply it by 1 to which we add markup percentage, which is 2...