1. ABC Corporation is interested in bidding on a contract. They expect to incur $450,000 in manufacturing overhead over the year. They use direct labour hours as a cost driver and expect to have 5,000 direct labour hours over the year. They pay their employees an average of $30.50 per hour. They expect the contract will use $75,000 in direct materials and 500 direct labour hours.

1. Calculate the expected job cost of the contract job

Ans:

2. What should ABC Corporations bid price for the contract be, assuming they would like to make 30% gross profit?

3. What is ABC Corporations profit on this job at this bid price in dollars?