[Sam8721538]

Thank you for your reply and redirection to the Ask the Tutor Forum

[Sam8721538]

Hi, this question is from a lecture slide in my course and I cannot get the solution as of now. Unfortunately the layout of the question I wrote changed after posted the question so I have typed it out again below. I have checked and the information was presented this way.

Company A bases its estimates on the following formula:
Total cost = Prime cost + 40% overhead
Selling price = Total cost + 25% profit

Job X (in £)
Direct Materials
200
Direct Wages (£5 per hour)
500
Prime Cost
700

Job Y (in £)
Direct Materials
100
Direct Wages (£5 per hour)
600
Prime Cost
700

Calculate the selling price of each job. Is this the best way to absorb overhead?

[Author]

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