QUESTION

# Use the following information to answer questions 6 and 7: Alabaster Co. had sales of $500,000 for April and$1,000,000 for May. Selling price per...

The company's research and development department has just designed a lightweight

component using new technology. Due to lack of competition, the marketing department

has decided to price the component based on the total manufacturing cost plus a markup

of 40%.

The following is a list of variable costs by department related to the new component:

Stamping:

Direct materials                                             $6.75 per component Direct labour$28.00 per hour and 0.8 hours per component

Variable overhead                                         $35.00 per machine hour and 0.25 machine hours per component Finishing: Direct materials$3.75 per component

Direct labour                                                             $32.00 per hour and 1.1 direct labour hours Variable overhead$22.00 per direct labour hour

What is the price per component if Hughes allocates fixed manufacturing costs based on

19,000 direct labour hours (rounded to the nearest cent)?

What is the price per component if Hughes allocates fixed manufacturing costs based on

19,000 direct labour hours (rounded to the nearest cent)?