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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
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% 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
10,650
Direct labour
3,260
Machine hours
140
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