Wright\'s Construction builds custom houses for individual buyers. On June 1, it

Question

Wright's Construction builds custom houses for individual buyers. On June 1, it had one job started with a beginning Work-in-Process of $56,000. During June the job was finished and sold. Direct labor for the job in June was $75,000 and direct materials used were $57,000. Overhead is computed at a rate of 65% of direct labor. There is a markup of 35% on all sales.

What was the selling price of the house?

Selling price is $319,612.50, please show how you came to your solution. I would like to see the steps and understand it.

Explanation / Answer

Beginning WIP    June 1                     $56,000.00
Expenses incurred during June
Direct Materials         $57,000
Direct labors              $75,000        
Overhead costs         $48,750          $180,750.00
Total costs                                     $236,750.00
Add : Markup 35% ($236,750x35%)    $82,862.50
Selling Price                               $319,612.50

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