Clay Co. has considerable excess manufacturing capacity. A special job order's cost sheet includes the following applied manufacturing overhead costs:
Fixed cost ---------$21,000
Variable costs ---$33,000
The fixed costs include a normal $3,700 allocation for in house design costs, although no in-house design will be done. Instead the job will require the use of external designers costing $7,750. What is the total amount to be included in the calculation to determine the minimum acceptable price for the job?
a. $36,700
b. $40,750
c. $ 54,000
d. $58,050
Answer: B
CPA Exam
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