An engineering firm operates a job costing system. Production overhead is absorbed at the rate of $8.50 per machine hour. In order to allow for nonproduction overhead costs and profit, a mark up of 60 per cent of prime cost is added to the production cost when preparing price estimates.

The estimated requirements of job number 808 are as follows:

The estimated price notified to the customer for job number 808 will be:

(a) $22256

(b) $22851

(c) $23446

(d) $24160 (2 marks)
CIMA — Management Accounting Fundamentals

Transcribed Image Text:

Direct materials $10650 Direct labour $3260 Machine hours 140