Your company is a provider of luxury transportation service that offers charter service. The following estimated overhead cost (indirect cost) was gathered from its annual budget for the current period:

• Repair and maintenance - $1,500,000.00

• Stationary supplies - $150,000.00

• Electricity 55% of budgeted amount of $420,000.00

• Petrol - $312,000.00

• Administrative expenses - $65,000.00

The company uses industry standard labour rates of $3,500.00 per hour sfor drivers and has budgeted a total of 2,000 labour hours for the year. It also budgeted a total of 250 charters for the year.

The company was awarded a contract to transport workers employed in various government organizations. The contract is for 150 labour hours.

Calculate the following. Show all workings:

1. prime cost of the job

2. absorption rate in $ per labour hours

3. Total cost of the contract