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It says:
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 $8 per hour.Production overheads are aborbed at a rate of 26$ per direct labour hour and non-production overhead are absorbed at a rate of 120% of prime cost.
What is the total cost of job number 1203?
A) $2000
🙂 $2400
C) $2840
D) $4400
$—
Direct Materials
300
Direct Labour (50 hours @ $8/hour)
400
Overheads:
Production Overheads (50 hours @ $26/hour)—-1,300
Non-Production Overheads ($700* x 120%)
840
Total Cost
2,840*$700 (Prime Cost = Direct Materials Cost + Direct Labour Cost)
HTH
Thank you very much Shunmas!
I didn’t know that i could apply the 120% to the total of the prime cost, i think that it was only for prime cost for unit, but i see that it’s the same thing!
Thank you!!
Open Tiution is great!
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