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A company operates a job costing system. Job number 1203 requires $300 of direct materials and $400 of direct labour. Direct labour is paid at the rate of $8 per hour. Production overheads are absorbed at a rate of $26 direct labour hour and nonproduction overheads are absorbed at a rate of 120% of prime cost. What is the total cost of job numer1203? Can I see a calculation please?
Materials: $300
Labour: $400Since labour is paid at $8 per hour, there must be 400/8 = 50 hours of labour
Production overheads: 50 hours x $26 = $1,300
Non-production overheads: 120% x (300 + 400) = $840
Total cost: 300 + 400 + 1,300 + 840 = 2,840
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