Question
Company L, a local road building contractor, had budgeted indirect costs for 2020 of 600,000. Budgeted labour hours for the year were 12,500 costing 260,000
Company L, a local road building contractor, had budgeted indirect costs for 2020 of 600,000. Budgeted labour hours for the year were 12,500 costing 260,000 and budgeted machine hours were 14,000. The company marks-up the total cost of each job by 40% to determine selling price.
The company has just completed a road repair for the local council. The direct costs and machine hours of this job were as follows:
Materials: 32,100 Labour: 305 hours Machining: 75 hours What is the total selling price of this job assuming the company allocates overheads on: labour hour basis
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A 53,084
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B 74,318
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C 65,436
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D 20,496
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