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John Moffat.
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sooha
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A company operates a job costing system. Job number 605 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 per direct labour hour and non-production overheads are absorbed at a rate of 120% of
prime cost.
What is the total cost of job number 605?
the answer is 2,840should I include non-production overhead in the cost calculation of the job ?
John Moffat
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Yes – you need to include all the costs for the specific job.
sooha
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