18. Janavee Construction applies all overhead to jobs on the basis of direct labor hours. This period, manufacturing overhead is budgeted to be $1,800,000, and direct labor hours are budgeted to be 90,000. Janavee pays direct labor $12 per hour.

Janavee bid on a job that it estimated would require $200,000 in direct materials and 10,000 direct labor hours. Janavee’s bidding policy is to add 50% to the estimated manufacturing cost of a job to cover operating expenses and produce a profit.

Janavee won the bid and completed the job, whose total cost came in at 105% of projected cost. Seven percent of that cost was spent on construction that was ruined because of weather conditions and had to be rebuilt. This occurrence was considered a normal part of the construction process.

a. How much did Janavee bid on the job?

b. What was the actual cost of the job after accounting for spoilage and rework?