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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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