Basic. An engineering firm operates a job costing system. Production overhead is absorbed at the rate of
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Basic. 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 non-production 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:
Direct materials $10650 Direct labour $3260 Machine hours 140 The estimated price notified to the customer for job number 808 will be:
(a) $22 256
(b) $22851
(c) $23 446
(d) $24160 CIMA - Management Accounting Fundamentals
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