A company operates a job costing system and prices its jobs by adding 15% to thetotal cost of the job as profit margin. The prime cost of a job was £3,420 and it hadused 78 direct labour hours. The fixed production overheads are absorbed on thebasis of direct labour hours. The budgeted overhead absorption rate was based upona budgeted fixed overhead of £150,000 and total budgeted direct labour hours of30,000. How much should the company quote for the job?

Answered: 00. How much should the company quote…

Business

Accounting

00. How much should the company quote for the job?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company operates a job costing system and prices its jobs by adding 15% to the
total cost of the job as profit margin. The prime cost of a job was £3,420 and it had
used 78 direct labour hours. The fixed production overheads are absorbed on the
basis of direct labour hours. The budgeted overhead absorption rate was based upon
a budgeted fixed overhead of £150,000 and total budgeted direct labour hours of
30,000. How much should the company quote for the job?

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