16.

Groom, Grooming Parlour has overheads of 10,400 per month. Each month 1,000 direct labour hours are worked and charged to specific jobs, each of which involves grooming dogs for shows.

The costs and time incurred on job number 57727 were:

Direct materials (): 28.00

Direct labour (hours): 4

Wage rate ( per hour): 16.00

Overheads are charged to jobs on a direct labour hour basis. The cost to the customer is full cost plus 120%.

Required:

Calculate the full cost and the amount to be charged to the customer for job number 57727.

a. the overhead absorption rate can be found by the formula:(5 marks)

[options provided, SELECT ONE: Direct labour cost for the job OR Total monthly overheads OR Total direct labour hours per month OR Direct materials for the job] divided by:

[options provided, SELECT ONE: Direct labour cost for the job OR Total monthly overheads OR Total direct labour hours per month OR Direct materials for the job]

b. The values can now be inserted, so using the formula in a. above, calculate the overhead absorption rate to two decimal places.):(5 marks)

Overhead absorption rate: =

c. The full cost of job number 57727 can now be calculated (Round your answer to 2 decimal places.): (5 marks)

Direct materials:

Direct labour:

Overheads:

Full cost of the job:

4. the amount to be charged to the customer for job number 57727 can be calculated:

(Round your answer to 2 decimal places.)(5 marks)

Profit added:

Amount charged to customer: