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Fact Pattern:Moss Point Manufacturing recently completed and sold an order of 50 units that had costs as shown in the next column.The company has now been requested to prepare a bid for 150 units of the same product.Direct materials  $  1,500Direct labor ($8.50 × 1,000 hours)8,500Variable overhead (1,000 hours × $4.00)*  4,000Fixed overhead**1,400$15,400*Applied on the basis of direct labor hours.**Applied at the rate of 10% of variable cost.

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Fact Pattern:Moss Point Manufacturing recently completed and sold an order of 50 units that had costs as shown in the next column.The company has now been requested to prepare a bid for 150 units of the same product.Direct materials   1,500Directlabor(  1,500Direct labor (8.50 × 1,000 hours)8,500Variable overhead (1,000 hours × 4.00)  4,000Fixedoverhead1,4004.00)*  4,000Fixed overhead**1,40015,400*Applied on the basis of direct labor hours.**Applied at the rate of 10% of variable cost.

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