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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

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.

Aug 17 2021 View more View Less

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