An engineering firm operates a job costing system. Production overhead is absorbed at the rate of $8.50 per machine hour.

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

The estimated price notified to the customer for job number 808 will be

A. $22,256

B. $22,851

C. $23,446

D. $24,160

 

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