JOB COSTING

Hello Everyone it is too simple LOOK! D.M=3000 D.L=4000 =7000 PRIME COST PRODUCTION OVERHEADS ARE 0.50% OF PRIME COST SO DO 7000*0.50=3500 3500 7000 =10500 PRODUCTION COST NON-MANUFACTURING COST IS 0.25% OF TOTAL COST SO DO 10500*0.25=2625 2625+10500=13123 THIS {13123} IS COST SO PROFIT IS 0.30% OF COST NOW 13123*0.30/130={{{{{{{{3028}}}}}}}}

The previous post is incorrect: Prime cost = 3000 + 4000 = 7000 Add 50%, so 7000 x 1.5 = 10,500 Add 25%, 20 10,500 x.1.25 = 13125. Current profits: 30% profit margin ie profits are 30% of sales, so the ratios are: Cost + Profit = Selling price 70 30 100 13125 So profit is 13125 x 30/70 = 5,625 Under the 30% mark-up (ie profit is 30% of cost) the ratios are: Cost + Profit = Selling price 100 30 130 Profit would be 13,125 x 30% = 3,937.5 Profits would decrease by 5,625 - 3,937.5 = 1,687.5 Model answer is incorrect.